Zurich Airport sells 5% stake in Bengaluru airport to Fairfax for $48.9 mn
Zurich Airport has inked an agreement to sell its 5 per cent minority shareholding in Bengaluru International Airport Ltd (BIAL) to the Prem Watsa-backed Fairfax Holdings for $48.9 million. Subject to customary regulatory approvals, the deal is expected to be completed within the third quarter of 2016. While there has been no word on the agreement from Fairfax, Zurich Airport has announced it on its website. BIAL owns and operates Kempegowda International Airport Bengaluru (KIAB) under a 30-year concession agreement from the Indian Government, with an option for a further 30-year extension. KIAB, which began operations in 2008, is among the first greenfield airports in India built under a public-private partnership. It is now India’s third largest airport. Since the start of construction in 2005, Zurich Airport has transferred its operational expertise to BIAL through an Operations, Management & Services Agreement. With the conclusion of the maintenance contract in 2015, Zurich Airport’s role has been reduced to a minority shareholder, leading to the decision to monetise the remaining 5 per cent stake in BIAL. In 2009, Zurich Airport had sold 12 per cent of its shareholding in BIAL to GVK Power & Infrastructure Ltd. Ownership pattern The GVK Group, which had acquired a 29 per cent stake from L&T and Zurich Airport and 14 per cent from Siemens Project Ventures in the past, recently divested its 33 per cent stake in the airport to Fairfax Financial Holdings Ltd for ?2,149 crore, to pare its corporate debt. GVK’s stake is now 10 per cent, while Fairfax is the largest shareholder with a 38 per cent stake (including the Zurich Airport stake). Siemens has a 26 per cent stake, while the Airports Authority of India and the Karnataka government hold 13 per cent each.
Snapdeal looking to monetise its zero-commission marketplace Shopo
Online marketplace Snapdeal is looking to monetise its zero-commission marketplace Shopo, which is targeted at small sellers and home-preneurs. Shopo claims a seller base of 1 lakh merchants across 800 cities. “We are working on monetisation and by the next quarter will introduce it in a phased manner,” said Sandeep Komaravelly, senior vice-president at Shopo. “We are looking at advertising on the platform and product listings on the platform to generate revenues. The model will continue to be commission free.” Shopo, which was launched in July 2015, competes with peer-topeer marketplaces such as Kraftly and Shopmatic. Snapdeal launched Shopo following high in-bound requests from small sellers on its marketplace. “Almost 80% of the in-bound requests on the Snapdeal marketplace comes from small businesses. The percentage of overlap of sellers between Shopo and Snapdeal is very less. For Shopo, the process of on-boarding and verification of sellers is faster,” said Komaravelly.
Top executives from Flipkart, Snapdeal, Ola and Paytm quit companies to start own ventures
India’s homegrown unicorns are witnessing a steady stream of top executives quitting to launch their own ventures, undaunted by cautious funding sentiments, and most of these entrepreneurs are not looking to emulate their former employers but to hit profit in a short time. Since May last year, at least 17 senior executives have left companies such as Flipkart, Snapdeal, Ola, Zomato and Paytm to launch startups. Some of them are already running fast-growing businesses and a few even sold out their business to their former employers. “I think the time has now come for more bootstrapped, more cash-flow friendly models,” said Srinivas Murthy, who quit ecommerce major Snapdeal as senior VP for marketing in January to take the entrepreneurial plunge. He plans to set up tech-enabled offline stores but refuses to go into details. “Mine isn’t a unicorn idea by any stretch; but it’s one which can turn profitable soon, with very little investment from VCs/PEs,” Murthy said. Bhuvan Gupta, who quit as VPengineering at Snapdeal in November to cofound online marketplace OfBusiness, said his startup already has over 100 employees and is doing business across 10 states currently. “People may call ecommerce ‘a cash burn business’, but we’re already cash positive,” he said. “I always wanted to do a startup and there’s always an age and time when you can take such risk,” Gupta said. The number of unicorn executives taking such risk is possibly at the highest ever. Industry observers and analysts attribute this to a combination of factors – higher aspiration levels of individuals, differences with the promoter CEO, cash in the bank, and a well-connected network. “An increasing number of professionals are leaving unicorns and the trend will continue unless the funding situation changes drastically,” said Anuj Roy, partner, digital practice, at executive search firm Transearch. “The ability to create impact, solve business problems and higher aspiration levels of individuals are the key drivers for these professionals to take an entrepreneurial plunge,” he said. According to a new report by CB Insights and KPMG, venture capital investments in India’s startups nearly halved to $1.5 billion in fourth-quarter 2015 from the July-September quarter. Tech startups are now focusing heavily on belt-tightening measures: job cuts are becoming increasingly common, hiring numbers are being pared down, and salaries to new joinees are down from the earlier soaring levels. Bulge bracket salaries paid out to top brass are increasingly coming under the scanner. “Some of these people who’ve exited saw this coming,” said a top honcho at a leading ecommerce company. “Others felt this was the right time to take advantage of a good idea and move out, given the big money, networks and resources they had at their disposal,” he added. Several senior executives have left top ecommerce marketplace Flipkart in recent months to start their own ventures, including former commerce and advertising business head Mukesh Bansal, former chief business officer Ankit Nagori, former senior director for retail Manish Kumar, and former chief people officer Mekin Maheshwari who is “on a journey to impact education in India”. In end-March, Bansal and Nagori announced that they are teaming up to launch a healthcare and fitness startup with $5 million of their own cash. Ola saw exit of its payments business head Rushil Goel and head of design Sunit Singh who is likely to launch a design startup. Swaminathan Seetharaman, earlier VP-engineering at the taxi aggregator, left to cofound a startup called Pianta.com. Namita Gupta, earlier chief product officer at Zomato, left to launch Airveda, which manufactures personalised air quality monitors. “I wanted to start a business that is economically viable and has a social objective,” she said. Priced at around Rs 10,000 apiece, the product is being lapped up by schools, hotels and hospitals. “The market is very big. Around 13 Indian cities feature in the list of most polluted places in the world. There are states (in India) with just one air quality monitor,” said Gupta, 37. Then there are Rahul Chari, former VP-engineering at Flipkart, and Sameer Nigam, earlier SVP-engineering at Flipkart, who started up together and then sold out to their former employer. In April, their payments startup PhonePe was acquired by Flipkart in under six months of the duo leaving the company. It is expected to give an edge to Flipkart as it looks to build a payment business to catch up with Snapdeal and PayTm. Aftab Malhotra, cofounder at London-based mentoring platform GrowthEnabler, said such things will increasingly happen “as senior executives who know the business in and out exit the company”. “They will come up with a business plan that caters to the gap the company wants to fulfil. And if they left the former organisation on an amicable note after proving themselves, it will be easier,” he said. Vinod Murali, MD of venture debt provider Innoven Capital, said, “There are founders who even fund such aspirations of their top employees. It’s their way of giving back to the startup ecosystem.”
Excise policy change: Liquor retailers cry loss
Liquor retailers on Tuesday alleged that leading Indian and foreign brands of liquor are not available in the market due to various changes in the state excise policy, which is leading to heavy losses to the sellers. MP Deshi Videshi Madira Vyavasai Association claimed that the changes in the policy have also led to losses to the tune of crores of rupees to the exchequer. Association president Jagjit Singh Bhatia told reporters that under the revised policy released earlier this year, the excise duty slabs were modified and Rs 800 or less duty slab has been ‘unofficially’ reserved for local companies. Some leading national brands are priced in the lower duty slab rates, but the excise department is putting pressure on national companies to list these brands on a higher slab by delaying label registrations and price approvals, he alleged. “A shift in slab will also result in these brands becoming more expensive for the end customer,” Bhatia said at a press conference. Additionally, many popular foreign brands are unavailable in the market because the department is not clearing their labels and price approvals, adding to the complexity of new licences. “As a result of these unfair practices, many leading national brands are unavailable at the retail outlets, leading to a lot of pressure on the retailers’ business,” he added. Over the last two years, owing to the unfair excise policy not only has retail trade suffered but the government revenue has also been impacted, he added.
Wages dry up at startups on back of funds drought; pay for fresh hires in Ola, Uber dips
Surge pricing at startups has ended for now at least. As investors put pressure on companies to save costs and improve cash flow, new hires in turn are getting offers that aren’t as spectacular as they used to be till some months ago. Compensation packages have been slashed by half or more while recruitment is also down by the same extent 50-60% since the beginning of the year, according to executive talent search agencies. Salary offers of Rs 1 crore and above per year have dropped to 100, a fifth of those as of this time last year. Average pay for fresh hires at startups including unicorns are down to Rs 50-70 lakh from Rs 1-1.5 crore in the previous year, said executives at five search firms including RGF Executive Search and Longhouse Consulting. These include companies such as Flipkart, Snapdeal, Urban Ladder, Ola, Uber, Quikr and Myntra. A unicorn is a startup that’s valued at $1billion or more. “Rs 1 crore is very rare these days and is offered to only very specialised people,” said Siddharth Raisurana, director, ABC Consultants, which hires senior executives for ecommerce companies. “Companies don’t want high-cost hiring and investors want to drive efficiency.” The hiring slump is directly related to investors becoming more watchful. “Companies are not hiring as they were earlier since there is a slowdown on the funding front,” said Debabrat Mishra, director, Hay Group India, a consultant. “With venture capital funding not as easily available as it was a year ago, crore-plus salaries, which were coming in hordes a year ago, are being impacted drastically.” Quikr Chief Operating Officer Atul Tewari said its salary policy remains the same. “We have always offered competitive compensation packages commensurate with experience and skills of the talent we bring on board, and we don’t foresee any change in that,” he said. An Ola spokesperson said: “We continue to grow fast and hire top talent to be part of our mission of building mobility for a billion people.” The other companies mentioned above didn’t respond to queries. ADVISING CAUTION Investors want companies to be cautious when picking people, preferring those who can help them scale up, said Vinod Murali, managing director, InnoVen Capital, a venture lending firm. “The days of mass crore-plus hiring are over,” he said. “Investors want startups to be more choosy and cautious in hiring. Initial phase of crazy hiring is over and out. Startups are also offering deferred compensation packages. The focus is on efficiency in operating costs and hiring where needed.” Along with compensation, mandates to head hunters have also dropped. The hike offered to a CXO-level hire in the past threefour months is not more than 20-40% of current compensation compared with 70-100% around the same time a year ago. RGF Executive Search and Longhouse Consulting, which hired as many as 10 CXOs for the unicorns as of this time last year, have been asked to look for three to four such people so far in 2016. “The hiring graph is dipping since January. The market is becoming saturated in the ecommerce space,” said GC Jayaprakash, executive director, RGF Executive Search. The sheen is wearing off as expectations become more realistic. For instance, the valuation of India’s largest ecommerce firm Flipkart has been marked down by investors. On Monday, US investment firm T Rowe Price, which invested in the company in 2014, reportedly cut the valuation of its 15% stake to $120.70 per share from $142.37 last year. A Morgan Stanley fund had cut the valuation of its investment by 27% in February.
Government to form panel to deal with complaints of online shoppers
The government will set up a committee to suggest ways to deal with complaints of consumers who trade on e-commerce platforms, Consumer Affairs Minister Ram Vilas Paswan said today. The decision has been taken in the wake of several complaints from online buyers related to delay or non-delivery of products and sub-standard goods, he added. “E-commerce is growing. There are many consumer complaints. We will set up a committee to look into this matter and suggest how to deal with it,” Paswan told reporters after the 30th meeting of the Central Consumer Protection Council (CCPC) here. The issue was discussed in length in the CCPC meeting and it was decided that the new committee will submit the report on e-commerce issues within 15 days, a senior Consumer Affairs Ministry official said. The suggestions made by the committee will be incorporated in the rules after the passage of the proposed Consumer Protection Bill in Parliament. The bill also has provisions to protect e-commerce consumers, he said. A Parliamentary Standing Committee is vetting the bill and is mostly likely to submit its report in the upcoming session of Parliament. The Ministry is also planning to hold separate discussions with e-commerce companies and NGOs on rising complaints of consumers and ways to curb them.
Punjab CM Parkash Badal approves Rs 750 crore for strengthening link roads
Punjab Chief Minister Parkash Singh Badal today approved Rs 750 crore for the repair and strengthening of 6,500 km link road in the state. While chairing a meeting to review the progress of strengthening of ongoing road infrastructure projects at his residence, Badal finalised repair, widening and upgradation of 6500 km link road stretches in the state, a release said here. He gave directions to the officers of Public Works Department to ensure the construction as early as possible. He said that the project of connecting all towns and cities to the lane roads were going on war footing and the repair, widening and refurbishment of link road work should be executed on full swing. It was informed in the meeting that the work would be started before May 20. Meanwhile, the chief minister also took stock of the ongoing Rs 1115 crore project that will strengthen the road infrastructure of 7,825 Kms of link road and directed the authorities to finish this project before the end of June. Additional Chief Secretary of PWD informed that more than 56 per cent of construction under this project have been completed while the remaining work would also be finished within stipulated time frame.
Passenger movement up by 2.47 lakh
For the first time passenger movement at Coimbatore International Airport has crossed the 15 lakh mark. On reaching 17.31 lakh last financial year, the airport is all set to join the select airports in the country that are considered as major airports. Reason for increase is cited as the over all average increase in passenger movement across the country. Passenger movement that is steadily on the rise is expected to go up further when Air Carnival begins operations – possibly by the second half of May. Passenger movement at the airport has gone up by 2,47,261 in 2015-16. The departure and arrival last financial year is the highest the airport has recorded so far. It is 16.66 per cent more than the passenger movement recorded the previous year – the highest so far. This increase was despite a mere 1.18 per cent increase in the aircraft movement. Passenger movement has gone up in both domestic and international sectors.
Bekal to join the big league, air connectivity soon
The famous Bekal Fort of the Chirakkal Rajas, one of the largest and best preserved forts in the State, is all set to figure on the aviation map with plans afoot for the construction of an airstrip. The airstrip that can accommodate 50-seater aircraft will offer last-mile connectivity to the Bekal Special Tourism Area that has already been developed as an exotic beach destination. The Cochin International Airport Limited (CIAL) has almost finalised a Detailed Project Report (DPR) for the construction of the airstrip. Incidentally, the authorities are yet to convene a meeting of stakeholders and the Bekal Resorts Development Corporation (BRDC) spearheading the destination development in Kasaragod district, thanks to the code of conduct in force ahead of the May 16 Assembly election. Sources said the government had already granted administrative sanction and had allocated Rs.35 crore for the first phase of the project proposed in Uduma panchayat. As much as 120 acres will be required for the airstrip, which will come up close to the notified area, while 40 acres are already in the possession of the government and the BRDC. For the record, it takes two hours by road from Bekal to the Mangaluru airport and the upcoming Kannur international airport. The airstrip will come in handy for the six resorts that have come up at Bekal to attract upmarket holidayers. Airlines can directly operate to Bekal or can offer air connectivity from international airports in the State.
Dharmendra Pradhan eyes India’s participation in hydro-carbon sector in Bangladesh
After looking at the West where he was on a three-nation tour to Iran and Gulf last week, Oil Minister Dharmendra Pradhan looked East when he explored India’s participation in oil and gas infrastructure projects in Bangladesh, Indo-Bangla oil and gas pipeline and finalised India’s participation in the two downstream projects in the neighbouring country during a three-day visit there. Hoping to enter Bangladesh’s largely unexplored hydro-carbon sector where India’s entry was once barred by the erstwhile BNP-Jamaat regime in Dhaka, Pradhan explored opportunities during his meeting with Prime Minister Sheikh Hasinaand her senior advisers. His visit marked the signing of an MoU on the broad aspects of cooperation in downstream oil and gas sector opportunities in Bangladesh between Indian Oil Corporation Ltd (IOCL) and BPC. Pradhan visited the port city of Chittagong on Tuesday where a contract was signed for the installation of second unit of Eastern Refinery Ltd. between Bangladesh Petroleum Corporation (BPC) and Engineers India Ltd. (EIL). What was unthinkable few years back is slowly becoming a reality with Indo-Bangla energy partnership gaining momentum. Companies from both countries are collaborating in the hydrocarbon sector ranging from trade in petroleum products, exploration work and consultancy services. India also supplies 2200 MT High Speed Diesel (HSD) to Bangladesh from Siliguri Marketing Terminal of Numaligarh Refinery Ltd (NRL) to Parbatipur Depot of Bangladesh Petroleum Corporation (BPC). India is planning to continue with the supply of HSD in a sustainable manner, Pradhan assured Bangla leadership during this visit. Indian Oil Corporation Ltd wants to build an LPG bottling plant jointly with Bangladesh Petroleum Corporation. After meeting domestic demand in Bangladesh, the rest of the produced gas will be exported to Tripura. Bangladesh is the seventh largest producer of natural gas in Asia. Geologists believe the country’s maritime exclusive economic zone holds one of the largest oil and gas reserves in the Asia-Pacific. Bangladesh has 27 exploratory hydro-carbon blocks in its Exclusive Economic Zone. During his meeting with Hasina, Pradhan shared details of Indian hydrocarbon infrastructure project proposals in Bangladesh, including setting up of LPG import terminal at Chittagong by IOCL and sought favourable consideration for creating win-win situation for both sides. Pradhan also discussed with Hasina the ‘Indo-Bangla Friendship Pipeline’ and called it as an important project for both countries. The Bangla PM sought Indianinvestments in the Special Economic Zones.