Petrol prices slashed 32 times, hiked 21 times since 2013: Nirmala Sitharaman
Prices of petrol were reduced 32 times and increased 21 times while diesel prices were slashed 19 times and raised 28 times since 2013, Commerce Minister Nirmala Sitharaman said today. The prices of ATF, petrol and diesel have been made market determined by the government since April, 2001, June 26, 2010 and October 19, 2014 respectively, Sitharaman said, replying on behalf of Petroleum Minister Dharmendra Pradhan, in Lok Sabha. “Since then, the public sector oil marketing companies (OMCs) take appropriate decision on pricing of these products in line with their international and other market conditions,” she said during Question Hour. The Minister said since April 1, 2013, petrol prices were decreased 32 times and increased 21 times and diesel prices were decreased 19 times and increased 28 times. Sitharaman said retail selling price (RSP) of petrol and diesel in the country are linked to their respective international prices and OMCs are at present applying Trade Parity Pricing methodology to compute the RSP. “Other cost elements in the RSP of petrol and diesel viz. excise duty, BS-IV premium, marketing cost and margins etc. are specific costs which do not increase/decrease with the volatility in international prices of petrol and diesel. “The element of excise duty which is specific in nature has been increased since November 2014. Most of the state governments have also increased VAT on petrol and diesel. After taking into account these factors, OMCs have passed on major portion of decrease in price to consumers of petrol and diesel,” she said. The Minister said the effective prices of PDS kerosene and subsidised domestic LPG have not been increased since June 25, 2011. Sitharaman said price of crude oil in the international market fluctuate depending on various factors including demand and supply of crude oil. Similarly, the requirement of crude oil imports for consumption of petro-products and fulfilling the needs of oil refineries is an inter play of several factors like success in new production of crude oil, blending of bio fuels, success in conservation efforts etc. The public sector oil companies import crude oil on term and spot basis as per the prevalent crude import policy, she said. The Minister said the impression that PSU oil companies make profits when the international crude price falls was “really not right” as they could make just 1.34 per cent profit after tax in 2013-14 and 1.49 per cent in 2014-15. Sitharaman said the PSU oil companies together had suffered around Rs 29,200 cross loss on petrol in the first nine months of last fiscal due to inventory cost and Rs 11,400 on diesel. Ernie Stautner Authentic Jersey
Flipkart no more bellwether of e-tail valuations
Flipkart, poster boy of Indian e-commerce, seems to be losing its bellwether status. While the Bengaluru-based company has witnessed four consecutive markdowns by global venture capital funds, the same trend is not reflecting in the valuations of other prominent e-commerce players. The markdowns, though notional, have narrowed the gap between the valuation of Flipkart and closest rival Snapdeal. While Flipkart’s valuation has dipped from $15.2 billion to $9.5 billion in the past few months, pushing it back to the 2014 level, Snapdeal is a close second with a $6.5-billion valuation. The caveat, however, is that it is only when a company is in the market to raise funds that the real valuation can be known. Flipkart’s previous major fund-raising was pegged at $700 million in June 2015, at a valuation of $15.2 billion. Snapdeal raised $200 million in February 2016, at a valuation of $6.5 billion. In February this year, Morgan Stanley marked down its stake in Flipkart to $103.97 per share, 27 per cent lower than the price at which shares of Flipkart were bought during the last fundraising. This reduced the value of India’s biggest online retailer to $11 billion. Subsequently, mutual fund house T Rowe Price reduced the value of its stake in Flipkart by 15 per cent. Flipkart no more bellwether of e-tail valuations The latest hit came as a double whammy last week when mutual fund investors – Fidelity Rutland Square Trust II and VALIC Co – marked down the value of their holdings in Flipkart by 20 per cent. Some market experts say the latest markdowns have reduced Flipkart’s valuation to around $9.5 billion. “Agreed, the markdowns are all notional and the real test would be when all these companies go out looking for funds. But if there is one more markdown, Flipkart might just end up losing the top spot to the number two player. Such valuations are important to these companies as this is how the market sentiments function,” said a senior consultant from a global financial firm. Flipkart has seen 12 rounds of equity funding worth $3 billion. In December 2014, its valuation went up to $15.2 billion, from $11 billion earlier. While previously, Flipkart’s valuation was used as measuring scale by investors to set the value of other e-commerce players in India, the recent markdowns have had little effect on other Unicorns such as Snapdeal, or Paytm, experts said. “At present, the markdown has only been for Flipkart. Others have not seen it. This, to an extent, shows it is not a market-wide phenomenon. We believe this happened because Flipkart, while doing well in some spheres, was not able to keep up its targets,” said an analyst. However, he added, “It does not mean such markdowns will not happen to Flipkart’s competitors.” To be fair to Flipkart, in the recent past, Morgan Stanley, T Rowe Price and Fidelity have marked down their other investments also. Morgan Stanley has done a markdown in data crunching company Palantir by 32 per cent, and in file storage company Dropbox by 25 per cent. Fidelity marked down its investments in Dropbox, Snapchat and Zenefits. T Rowe Price marked down its stake in Dropbox by more than 50 per cent, as well as in global cab aggregator Uber. Some market experts believe such markdowns are normal and success or failure of a company cannot be gauged by this. “Such a drop in valuation is a momentary phase, similar to rise or fall of a share in the stock market. We cannot just decide on the success or failure of a company on this basis. Global mutual funds have to file the details of their investments with the government authorities and the markdowns are done in line with the present status of their investments. It does not mean the global investors have lost faith in a particular company,” said Anil Kumar, founder and CEO of RedSeer Consulting, a research and advisory firm. Recently, Flipkart co-founder Sachin Bansal said the markdown by an investment firm was a theoretical exercise, and not based on any transaction. Michael Jordan Jersey
Kandla smart city proposal to be presented on May 11
It’s just not mega cities that are looking towards a transformation-of being smart cities-but even port towns will have this privilege. The union government had already announced development of 12 major port towns. But Kandla port form Gujarat will be one of the first to put forth its smart city plan. A presentation on Kandla’s smart city will be made on May 11 in New Delhi. The smart city plan will be executed by the Kandla Port Trust over 900 hectare. It will even extend to the neighboring Gandhidham town. The KPT has appointed Tata Consultancy to prepare a report on the smart city plan. The projects will be implemented by a special purpose vehicle and most projects will be executed through PPP mode. His is to introduce paid civic services. The KPT will handle construction of roads that connect public areas, while while internal roads and other civic infrastructure facilities will be constructed by developers. Joonas Donskoi Womens Jersey
PMC yet to receive Smart Cities Mission funds from state
The Pune Municipal Corporation (PMC) is still waiting for funds for the Smart Cities Mission even a month after the allotment was announced. The Union government had announced that Rs 194 crore would be given to Pune under this mission as part of the first instalment. The funds were to be deposited in Pune smart city project’s account within one week. Along with funds from government, PMC and the state government are expected to raise funds for the actual implementation of this project. The civic body wants to give thrust to involving private investors. The funds will be used for starting the projects in area development section i.e. Aundh-Baner-Balewadi and pan-city areas. PMC would start 15 projects under this scheme in the next three months. Smart city initiatives are estimated to cost Rs 3,480 crore. As per PMC officials, the funds were handed over to the state government on April 6. They confirmed that the funds should have reached PMC in a week’s time. “We have come to know that the funds will be dispatched soon. They are expected this month. We are following up at the state as well as the Union government level,” said PMC official Ashish Agrawal, who is working on the smart city project. Speaking about the delay, he said that the process of making budget allotments and other formalities, such as approvals from different stakeholders, are under-way, leading to the delay. The special purpose vehicle (SPV), which was registered in March, would implement the project. Named ‘Pune Smart City Development Corporation Limited,’ it has seven stakeholders. Of them, six include the mayor, standing committee chairman, leader of the House, leader of opposition, PMC commissioner and additional commissioner. The divisional commissioner would be the seventh stakeholder as a state representative. “If the PMC has to participate in the process of allocation of funds, we will be informed accordingly. We are yet to get the details about status of funds,” said Ulka Kalaskar, chief accountant of PMC, replying on what role PMC will play to utilise the funds. Conor Sheary Authentic Jersey
Bengaluru : The City needs a sustainable and realistic plan
Citizens expecting solutions to traffic woes, mounting garbage and missing municipal services may be disappointed as the plan does not address these sectors directly . Following the diktats of the Karnataka Town and Country Planning Act 1961, it addresses land use, road networks, reservations, and building regulations. These limited aspects, however, have a significant impact on the city’s future.Key opportunities include: 1) Reviving the city centre to avoid the `donut’ effect: Twenty nine wards are witnessing declining population growth rates. These areas within the inner ring road of the city have the highest levels of municipal services and public transport access. Relaxing rigid zoning, introducing mixed uses, increasing densities and FAR (built up area) will encourage redevelopment and increase the affordability and supply of building stock.Attempts to lower FAR artificially, below than what is already consumed, could be counterproductive. The unsustainable `donut’ effect -where the city centre empties out and un-serviced peripheries become the destinations for housing and jobs -must be avoided. 2) Uniting urban form with mass transportation: With billions being spent on the metro rail network, the shape and pattern of urban development must complement it. The highest mix of uses, FAR, dwelling unit densities, parking maximums and quality public spaces need to be encouraged to form `transit-oriented development’.This will reduce time and distance of travel, encourage people to walk, bicycle and use public transport and reduce reliance on personal vehicles. 3) Involving local stakeholders through local area planning: Implementing the generalised city master plan locally will be futile without interactive participation. The Master Plan and the KTCP Act 1961 must enable Local Area Plans (LAPs) at the ward level to bring in local knowledge, dynamism, values and priorities. LAPs serve as the common platform to bring together planning agencies, service provision agencies and people to implement proposals on the ground. 4) Adopting alternatives to compulsory land acquisition: Critical projects such as the Peripheral Ring Road have been languishing due to resistance from land owners and prohibitive costs. Alternatives with better success are being used in other states, such as land readjustment and land pooling.These mechanisms only readjust enough land to provide roads and amenities while the remaining is returned to the owner. The plots reduce in size but increase dramatically in cost, reducing dissent.Master plans unfortunately , are notorious for their violations than their implementation. Routine setback encroachment, disproportionate FAR consumption, non-permissible uses, and buildings on reservations occur. Fixes are later attempted through self-assessment fees for violations or change of use, de-notification, begging the question whether such controls-based planning is effective at all. While debates and complexities abound on whether to adopt the more effective international planning frameworks or leave it to the Bangalore Metropolitan Planning Committee, the BDA is getting ready to release its draft plan. Let’s hope a sustainable and realistic plan awaits us. Josh LeRibeus Jersey
Only 40% of funds cleared for highway maintenance: Panel
Governments have come and gone announcing projects worth lakhs of crores of rupees to build new highways and expressways, but none has allocated required budget for maintaining the expanding National Highway stretches. A parliamentary panel has cited how this allocation is barely 40% of the requirement. “Since, maintenance is a non-plan activity, governments have a tendency to apply ad hoc cuts due to resource constraints,” the committee has observed in its report submitted to Parliament last week. This comes as a wake up call for the present government, since highway minister Nitin Gadkari has announced plans to bring more state roads under NH network and increase its length from the present 1.3 lakh kilometres to two lakh kilometres. Once a state road is notified under NHs, state governments stop maintaining them. The committee has observed, “For 2016-17, only Rs 2,834 crore has been allocated for maintainance as against the estimated fund requirement of Rs 7,070 crore.” The non-plan allocation for maintenance of NHs in budget estimate of 2015-16 was Rs 2,701.40 crore. This was decreased to Rs 2,698.40 crore at revised estimate stage. The panel has recommended that maintenance work be given increased priority and to enhance fund flow. “This can be done by diverting funds from those heads where savings are expected,” the panel has suggested. Lavonte David Authentic Jersey
238 infra projects to cost Rs 1.6 lakh crore more on delays
Project cost of as many as 238 infrastructure projects, monitored by the Statistics Ministry, have overshot by Rs 1.6 lakh crore from their original estimates due to delays on account land acquisition forest clearances and other reasons, official data showed. The Statistics Ministry is monitoring 1,071 infrastructure projects worth Rs 150 crore or above each in various sectors such as power, railways and road. During February 2016, of 1071 projects, 238 projects reported cost overruns and 341 projects reported time delays. “Total original cost of implementation of 1,071 projects was Rs 12,66,248.36 crore and their anticipated completion cost is likely to be Rs 14,26,985.93 crore, which reflects overall cost overruns of Rs 1,60,737.57 crore (12.69 per cent of original cost),” the data by Statistics Ministry showed. According to the data, expenditure incurred on these projects till February 2016 was Rs 5,66,058.05 crore, which is 39.67 per cent of the anticipated cost of the projects. However, compared to April 2015, the number of projects reporting cost overruns came down to 22.22 per cent in February 2016 from 30.47 per cent of total monitored projects last year. Projects reporting time overruns fell to 31.84 per cent in February this year from 42.61 per cent in April 2015. In April 2015, out of 758 projects on the monitor of Statistics Ministry, 231 projects reported cost overruns and 323 projects reported time overruns. Speedy implementation of projects assumes significance in view of government’s push to move towards high growth trajectory of over 8 per cent and touch double digit mark in few years. According to the Ministry’s report on these projects, the reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in forest clearance and delay in supply of equipment. The other such reasons are fund constraints, geological surprises, problems in equipment erection, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues, ROU/ROW problems, law and order situation etc. Joel Edmundson Jersey
Zomato’s $1bn value slashed by half
After successive markdowns of highly priced tech startups by US mutual funds, it’s now HSBC’s brokerage arm which has slashed the paper valuation of restaurant-discovery platform Zomato, while taking stock of the startup’s publicly traded shareholder InfoEdge. This is possibly the first instance of such a markdown being done by an India-based equity research team for a privately held internet company. A note circulated by the HSBC arm last month covering InfoEdge raised grave doubts around Zomato’s steep valuation, its international expansion and its overall business model. HSBC Securities and Capital Markets in a detailed report, titled ‘India Internet – Lot of Growth but Slim Pickings’, posited, “Zomato is present in 23 markets so early on and none is profitable, which implies that to address both the investments in last-mile delivery and losses in international operations, fund-raising will be a continuous phenomenon, suggesting current valuations don’t make much sense. We do a discounted cash flow (DCF) analysis and value the business at 50% lower to the $1-billion valuation.” InfoEdge holds nearly 50% in the Gurgaon-based Zomato and also runs sites like Naukri.com, 99acres and Jeevansathi, among others. In an emailed response to TOI’s query, a Zomato spokesperson said, “We’ve not raised any financing round since the last one to have a valuation reset. Our investors are as bullish about Zomato as they were before. We are growing fast and are on course to become profitable as a company very soon. Beyond this, we do not want to comment on valuation markdown speculation of third parties.” Zomato has had a tough last one year as it prunes its business, leading to hundreds of people getting laid off, closure of operations in a few cities, and a stream of top-level talent leaving the company. Having stayed away from the food ordering segment for a substantial period of time, Zomato entered the space in April 2015. Zomato Order has been fighting it out with the likes of Bangalore-based Swiggy to capture market share in a category which has very high user acquisition costs. The note by analysts Rajiv Sharma and Darpan Thakkar deep-dives into why the brokerage firm has taken a negative view on Zomato and also on InfoEdge. “Competition will always find it easy to take share via other routes, particularly online last-mile delivery model. We understand that last-mile delivery is not easy but unless Zomato leads in this space it will find it tough to retain market share. Particularly, we have Swiggy in India which is very active in the space and has been getting funding at regular intervals,” the note explained. Restaurants that pay for advertising only account for around 6-8% of Zomato’s overall database, the analysts said. In the same report, HSBC lowered the valuation of another InfoEdge investee company, PolicyBazaar, by 10% from the current $200 million. The Times Group, which publishes this paper, runs portals like Magicbricks, Timesjobs and competes with InfoEdge’s properties. Zomato, which counts Sequoia Capital, Temasek and VyCapital, besides InfoEdge, as its investors, has in all scooped up $224 million in capital since its inception in 2008. When it raised its last round of funding in September last year led by Temasek, the company had said it will use the fresh capital in new businesses, such as online ordering, table reservations (Zomato Book), cashless payments, point-of-sale, and its white label platform. Some of these businesses have already been shuttered (like cashless payments due to lack of product-market fit), the company had said earlier. In February, Zomato said it has hit operational break-even of its businesses in India, the UAE, Lebanon, Qatar, the Philippines and Indonesia. But talks with prospective investors for infusion of capital have gotten scuppered because of a valuation mismatch. Trouble Continues For Food-Delivery Startups The so-called food tech category is one of the worst-hit in this funding cycle, which peaked last year, as ebullient investors poured a slug of money into consumer facing internet businesses. Casualties in the space include Mumbai-based TinyOwl, which is backed by marquee VCs Sequoia Capital, Matrix Partners and Nexus Venture Partners, and Foodpanda, a part of Rocket Internet’s portfolio, along with smaller players such as Dazo and Spoonjoy. Since the end of last year, mutual funds, which invest in public and privately held companies, have been reworking valuations of their investee companies, largely in the tech space. Flipkart, India’s largest e-commerce player valued at $15 billion, has seen its value being cut by a group of existing investors. Though, in recent months, questions have been raised on the methodology being adopted by mutual funds while making these readjustments. The view so far has been that these funds, which have heavy exposure to the public markets, have followed the plummeting stock market which saw major corrections in tech stocks between August last year and January this year. Recently, though, Fidelity reversed many valuation markdowns in startups like Snapchat and cancer drug startup Stemcentrx, which was sold to drugmaker AbbVie for $5.8 billion just last week. Derrius Guice Jersey
Why shoppers are flocking to the internet this season
It has been a few years since people started shopping online to make their big purchases for festive occasion. And this year is no different. Though not many have invested in jewellery, the sale of gadgets, clothes, holidays and daily utilities seems to have soared. And thanks to summer offers and Mother’s Day sales, they are making the most of all the discounts. Coupling offers An interesting trend this year is that though there are not many offers exclusive to Akshaya Tritiya, several sites have coupled Mother’s Day sales with it. Nitisha Retish, a market trend analyst, says, “Many jewellery sites are offering zero-making charges and cashback on certain products. Mother’s Day sale on major retail sites have great discounts on books, home decor, furniture and kitchen utilities.” What’s hot on the web Gold and other precious metals: Thanks to the increase in the price of gold, people are restraining from buying earrings, neck pieces and other accessories. However, many are investing in coins and other precious metals and stones like silver, sapphire and pearls. “The rate of the yellow metal has been fluctuating and I was not very sure if I will be incurring a loss if I buy online. Though I bought a beautiful kundan bangle last Akshaya Tritiya from a popular site, I’ve only booked a gold coin and idols of Lord Ganesha and Goddess Lakshmi this time,” says Dhivya Raman, a homemaker. Youngsters and working women find this an apt opportunity to buy trendy accessories. Rohini Hari, a 28-year-old investment banker, says, “Several jewellery portals offer a minimum of 30 per cent off on latest designs in 18 K and 22 K gold and it’s a great bargain if you are not into traditional pieces.” She adds, “The sites are flooded with special Akshaya Tritiya collections that are not heavy on the pocket. My colleagues and I’ve bought trendy bracelets, elegant pendants and chic earrings for the festival. Apart from gold, there are navaratna collections, pieces that are traditionally edgy and some with birth stones that are meant to bring good luck.” Gadgets and utilities From smartphones and music docks to comfy bean bags and wardrobes, people are investing in things that are useful for them on an everyday basis. “Long-term investments are not only restricted to gold and properties. Many believe that buying items that they use every day or that add an aesthetic appeal are important as well,” points out Nitisha. Girish Kamat, a project manager with an IT firm, says, “I’ve placed order for a microwave oven, some new sofa covers and an attractive lampshade from the ongoing sale. It’s a belief that one must buy kitchen utensils on this day. So, we opted for a kitchen gadget that will come handy instead of utensils.” Clothes and accessories This year, splurging on fashion for Akshaya Tritiya seems to be the new trend. Several clothes and accessories portals have mega sales, though they are not specifically for the festive occasion. Neha Keshav, a dentist, says, “From ethnic kurtis and saris to LBDs and palazzos, there are a variety of options to choose from. Shoes, bags and scarves are also among the hot favourites. It felt weird in the beginning when I told my friends that I’m going to splurge on summer accessories and festive clothes this Akshaya Tritiya. Thanks to the variety of sales and discounts online, I couldn’t resist myself and now, all my friends have followed suit, too.” Corporate gifts Another interesting trend is the surge in corporate gifts. Nitisha adds, “Gold-plated pens, office sets, cabinets, retail and online gift vouchers, spa deals – these are in demand. Apart from reasons like the start of a new financial year to beating the summer, Akshaya Tritiya is just another excuse.” Mike Hilton Jersey
Multinationals can take advantage of relaxed FDI norms: DIPP
The government today said multi-national giants like Apple can take advantage of the relaxed FDI norms in the single-brand retail sector. Secretary of the Department of Industrial Policy and Promotion (DIPP) Ramesh Abhishek said that as per the specific FDI policy announced in November last year, the local sourcing requirements could be relaxed for state-of-the-art and cutting-edge technology. “It was not a policy for one individual company. The government works on transparent policies which are applicable to all who fit into that. So, whether it is Apple or Orange or whatever, whosoever fits into that policy will take advantage of it,” Abhishek said here at a CII function on manufacturing. There are a whole lot of many applications in the single-brand retail sector, the secretary said. DIPP has already recommended exempting iPhone and iPad maker Apple from the mandatory 30 per cent local sourcing norms. Chinese firms Xiaomi and LeEco have also submitted applications to open stores in the country. Speaking at the same vent, NITI Aayog CEO Amitabh Kant said the government does not work on individual cases. “If you look at the policy regime, we have radically liberalised it across sectors, whether it was infrastructure or FDI regime,” Kant said. “Now, we are going to do this in social sector from education to health, creating world-class universities… We never work for individual specific case, that has never been done.” Kant also said land cost component for projects has increased to 40-42 per cent from 14-15 per cent, but “despite that, the government went ahead and acquired land”. There are a lot of projects in the pipeline and “you will see lots of action in coming years. 10-12 states should grow at a double-digit rate. Every state cannot be a manufacturing state,” he said. Talking about ease of doing business, Kant said the government wants to improve its ranking within top 50. On GST, CII President Naushad Forbes called for quick implementation of the crucial tax reform. “It is frustrating to be deprived of benefits of the transformative reform of GST. Introduction of GST could add Rs 8,000 to the income of the average Indian household each year which would progressively increase in future. Hence, the opportunity cost of not introducing GST was high,” he explained. CII Director General Chandrajit Banerjee stressed on political maturity and convergence of political minds to get GST through. RR KKS ARD Chris Chelios Jersey