…and other big stories from India and around the world
Rakesh Sharma
Uber’s IPO is a flop
Cab aggregator Uber's debut on the stock market on May 10 did not turn out the way investors were hoping, with its shares sliding on the first day. With it, Uber dragged down its stakeholder SoftBank Group, which was down 3.25 percent on May 14. Reports indicate that as Uber's IPO appear to have flopped, the Japanese conglomerate lost as much as $9 billion in market value.
Uber’s second day of trading was even worse. It closed the day’s trade down more than 10% at about $37.1, bringing the market cap of Uber to around $62 billion.
IL&FS continues to be a mess
As a result of the mess surrounding IL&FS, it has now come to light that almost 2,000 companies stand to lose around Rs 9,000 crore incurred due to investments made in the group's firms from private provident and pension funds, as per a report in Business Standard. The companies, which includes public and private players such as State Bank of India, Bharat Petroleum Corporation Limited, Indian Oil Corporation, Food Corporation of India, Infosys, Tata Power and Lupin will have to make good on the loss in principal and interest income by these funds, as per the Employees’ Provident Fund Scheme (EPFS), 1952.
The investment of these funds were in IL&FS, IL&FS Financial Services (IFIN), IL&FS Transportation Networks (ITNL), and Hazaribagh Ranchi Expressway. Of these IL&FS, IFIN, and ITNL are 'red list' companies (companies with no cash).
Indian drugmakers accused of multi-billion dollar worth anti-competitive practices
Yesterday, the stocks of leading Indian pharmaceutical companies tanked, and India’s largest drug maker Sun Pharma was hit the worst, with its shares dropping almost 20 percent at one point before recovering and ending the day with a loss. Today, Sun ended about five percent higher.
Vishwanath Pilla reported for Moneycontrol, “The steep fall of pharma stocks was attributed to the US antitrust lawsuit filed against 20 generic pharmaceutical companies in the country. The lawsuit named Sun Pharma, Aurobindo Pharma, Dr Reddy’s Laboratories, Lupin, Glenmark, Wockhardt and Zydus Cadila were a few Indian companies reportedly named in the lawsuit.”
Connecticut Attorney General William Tong, who is leading 44 states in the case, have said they have hard evidence to show the anti-competitive practices of these companies. "We have hard evidence that shows the generic drug industry perpetrated a multi-billion dollar fraud on the American people. We have emails, text messages, telephone records, and former company insiders that we believe will prove a multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs,” Tong said. The lawsuit alleges that some of these deals to fix prices have happened on golf outings or during "girls nights outs" or over text messages.
According to the lawsuit, sometimes, one company would decide to raise prices on a particular drug, and other companies would follow suit. Other times, companies would agree to divide up the market rather than compete for the market share by lowering prices.
In case of some drugs, the lawsuit mentions the prices were hiked by as much as 1,000 percent.
Teva and Aurobindo Pharma have released statements saying they would defend these charges.
WhatsApp wants you to update your version
According to a report on Reuters, Facebook's WhatsApp has urged users to upgrade to the latest version of its popular messaging app following a report that users could be vulnerable to having malicious spyware installed on phones without their knowledge.
"WhatsApp encourages people to upgrade to the latest version of our app, as well as keep their mobile operating system up to date, to protect against potential targeted exploits designed to compromise information stored on mobile devices," a spokesman said.
The Financial Times reported that a vulnerability in WhatsApp allowed attackers to inject spyware on phones by ringing up targets using the app's phone call function. It said the spyware was developed by Israeli cyber surveillance company NSO Group. Asked about the report, NSO said its technology is licensed to authorised government agencies "for the sole purpose of fighting crime and terror," and that it does not operate the system itself.
Jet Airways top people resign
Jet Airways said on Tuesday its Chief Executive Officer Vinay Dube had resigned with immediate effect.
Dube's exit comes shortly after the resignation of its Chief Financial Officer Amit Agarwal, that was announced earlier in the day. Agarwal's resignation was effective May 13, the company said.
The debt-strapped company said Dube and Agarwal resigned due to personal reasons, without providing further details. Rahul Taneja, the airline's chief people officer, too has resigned, CNBC TV 18 reported.
Meanwhile, Business Standard reported that “Etihad Airways has put in stiff conditions, which include a substantial write down of the Rs 9,000-crore loans, as a prerequisite to run Jet Airways. The Abu Dhabi-based airline has also put the onus of finding a majority investment partner on the Jet lenders.”
Monsoon will come on the 4th of June, but not hard
According to a report on Reuters, India's monsoon rains are expected to arrive on the southern Kerala coast on June 4 and deliver less rainfall than average in 2019, the country's only private weather forecasting agency said on Tuesday, dampening prospects of higher farm and economic growth in the $2.6 trillion economy.
Rains usually lash Kerala state around June 1 and cover the whole country by mid-July. Timely rains trigger planting of crops such as rice, soybeans and cotton.
The country is likely to receive 93% rainfall of the long period average, Skymet said in a statement. The monsoon season delivers about 70% of India's annual rainfall and is key to the success of the farm sector in Asia's third-biggest economy.
Airtel planning to scrap all post-paid plans under Rs 499
According to a report on PTI, Bharti Airtel has tweaked its post-paid plans, a move that involves gradual phasing out of offerings that are less than Rs 499 and retaining limited number of plans above it in order to help the company chase better realisation from mobile subscribers, improving the Average Revenue Per User (ARPU), according to a source. Essentially, it has scrapped the Rs 299 plan and is in the process of gradually phasing out Rs 349 and Rs 399 post-paid plans. Even the number of plans above Rs 499 will be reduced to just three - Rs 749, Rs 999 and Rs 1,599.
A recent report by SBICap Securities, however, said Airtel had "done well" on ARPU as it seems to have improved about 20 per cent sequentially, while Jio's ARPU declined about 3 per cent.
On Monday, rival Vodafone Idea reported that its ARPU for the March quarter grew 16.3 per cent to Rs 104, from Rs 89 in the October-December 2018 period.
Airtel has about 284 million subscribers in India.
Chanda and Deepak Kochhar grilled by ED in Delhi
Former ICICI Bank CEO Chanda Kochhar and her husband Deepak Kochhar on Tuesday again appeared before the Enforcement Directorate in Delhi in connection with an alleged bank loan fraud andm oney laundering case registered against them. They were questioned by the agency on Monday for over eight hours. This was the first time they were grilled in Delhi. They have been questioned by the agency in Mumbai in March.
They were questioned about their personal and official dealings with the Videocon group. Their statement was recorded under the Prevention of Money LaunderingAct (PMLA) by the investigating officer of the case.
Deepika Padukone invests in Epigamia; Bollywood likes to do business
According to Business Standard, Drums Food International, the parent company of fresh FMCG brand Epigamia, Monday announced a multi-crore strategic partnership with Deepika Padukone, which includes an investment from the Bollywood actress. The actor will also endorse the brand as its brand ambassador and act as a strategic advisor to the FMCG brand.
She currently endorses several high-value brands, such as Coca-Cola, Axis Bank, Vistara, Kellogg’s, Vogue, Tissot, Van Heusen, Tanishq and Nike. Padukone also has her own label, All About You, for online shopping site Myntra and has backed startups like online furniture rental platform Furlenco, and beauty products marketplace Purplle.
Deepika Padukone is one of the richest Indian celebrities, and is reported to have a brand value of $102.5 million.
Deepika joins a long list of Bollywood stars who have set their eyes on investing outside of their own talent.
Sunil Shetty owns Mischief Dining Bar and Club H20 and has a 50 percent stake in Hakim Aalim's salons. He has ventured into the designing and development of luxury real estate projects through his company S2 Reality.
Hrithik Roshan launched HRX, a Rs 120 crore active wear brand that is giving Puma close competition on Myntra, India's largest online fashion player. The actor picked up equity stake in Bengaluru-based fitness startup CureFit and designed a signature workout HRX workout for the gym.
Salman Khan’s Being Human brand that sells T-shirts and other merchandise is a roaring success.
Shilpa Shetty, after her stint with the Rajasthan Royals, established a gold selling company called Satyug Gold. Shilpa also turned jewellery designer with this venture. She stepped into the real estate sector with grouphomebuyers.com a real estate e-commerce platform to help home buyers. The business was more in line with the launch of her spa and wellness chain IOSIS in 2009, and her joint venture with Vandana Luthra's VLCC to offer yoga and physiotherapy services in India.
Former Miss Universe Sushmita Sen started her own production house Tantra Entertainment Private Limited (TEPL). She owns the beauty pageant franchise for Miss Universe India. In 2009, she unveiled her new brand, I AM, along with the beauty pageant division I Am She.
The trade war heard all over the world could be indefinite
The New York Times reported that the “United States and China have intensified their trade dispute, as Beijing said it would increase tariffs on nearly $60 billion worth of American goods and the Trump administration detailed plans to tax nearly every sneaker, computer, dress and handbag that China exports to the United States.
The escalation thrust the world’s two largest economies back into confrontation. While President Trump said on Monday that he would meet with China’s president, Xi Jinping, next month in Japan, the stakes are only increasing as the president continues to taunt and threaten China, causing it to retaliate on American businesses.
Financial markets fell on Monday after China detailed plans to increase tariffs, with the S&P 500 index down more than 2.4 percent for the day and more than 4 percent this month. Shares of companies particularly dependent on trade with China, including Apple and Boeing, fared poorly, and yields on three-month Treasury securities exceeded those on 10-year bonds, a sign that investors may be souring on the outlook for short-term economic growth.”
According to the Times, the move came after Mr. Trump increased tariffs on $200 billion of Chinese goods to as much as 25 percent on Friday, and threatened to move ahead with taxing the remainder of goods that the United States imports from China. The Office of the United States Trade Representative released a list on Monday of the roughly $300 billion worth of products that could face up to a 25 percent tariff and requested public comment, which will begin the formal process for enacting those duties.
One industry insider said that the entire American shopping cart could end up becoming more expensive here onwards.
