'Hello, Just Dial? Tata, here.'

Good morning,

Reliance sold stakes in Jio Platforms to further its online retail drive, but Tata is doing exactly the opposite.

With BigBasket almost in the bag, the Tata Group is now making a play for , a company that disrupted the classifieds business two decades ago but, like every other company on earth, is dominated by Google and Facebook online.

Elsewhere in today’s newsletter:

Tata in initial talks with Just Dial

Tata's super app may be delayed but that hasn't stopped India's largest conglomerate from exploring tie-ups to further its digital drive.

Driving the news: Tata Digital has held exploratory talks with Just Dial, an online search engine for local businesses, to strike a strategic alliance or pick up a stake. An initial round of conversations has taken place, although a final outcome is not imminent, people aware of the development said.

Three-way contest: Tata’s digital drive is an attempt to better compete with Reliance and Amazon in India’s e-commerce space.

■ What is Reliance doing? After Jio Platforms’ fundraising blitzkrieg in April-May last year, refiner Reliance Industries has increasingly pivoted to consumer-focused businesses by exploiting the synergies between its retail and telecom arms.

The product of those synergies is JioMart, which brings together online and offline heavyweights—Google, Facebook, Reliance Jio and Reliance Retail—to tap into India’s largely unorganised grocery market.



■ What is Amazon doing? Apart from stalling the Reliance-Future deal, Amazon has continued to step up its India investments, which currently stand at $7.5 billion.

While India’s e-commerce policy threatens to be a spanner in the works, CEO Jeff Bezos’ successor Andy Jassy is expected to continue the push into what is arguably the world’s largest untapped retail industry.

■ What is Tata doing? The so-called ’salt-to-software’ conglomerate’s might doesn’t extend to digital, which is ironic since it owns the country’s IT bellwether.

Tata is now bringing together all its consumer-facing online enterprises under one umbrella, but that’s easier said than done. The amalgamation is delayed, as is the acquisition of BigBasket, which is seen as crucial towards Tata building an app to do it all.

Oyo! Tribunal rules in Zo’s favour


In November 2015, Oyo sought to acquire Zo Rooms, a budget hotel room aggregator, and the two companies signed a term sheet—an agreement outlining the basic terms and conditions under which the investment would be made.

But Oyo terminated the deal less than a year later, in September 2016, claiming it couldn’t find any potential value in the business.

Now, more than five years later, a court-appointed arbitrator has ruled that Oyo is bound by the terms it agreed on, under which Zo Rooms’ founders and lead investor Tiger Global would be entitled to 7% of Oyo.

The ruling: The arbitrator said Zo Rooms’ parent, Zostel Hospitality, was entitled to claim relief in the form of allotment of shares from the respondent, Oyo parent Oravel Stays. The order also said Zo Rooms was entitled to claim the cost of its case.

• However, the arbitrator turned down Zo’s plea for $17 million in damages, a $1-million payment to the company’s founders, and an alternative settlement of around $89 million.
  

Zo responds: Zo Rooms said Oyo had breached the term sheet by not executing the deal, and that it had promised its own shareholders that it would have a 7% stake in Oyo.

Oyo refutes: Oyo strongly refuted Zo Rooms’ claim that the tribunal had granted it a share in the company, and said it would contest the order to pay Zo’s legal costs.

• “The final award purports to provide Zostel a right to initiate ‘appropriate proceedings’ and for seeking execution of the definitive agreement, while no specific remedy was granted, except against their prayer for a cost, which Oyo will vehemently oppose,” Oyo said in a statement.
  

Inhospitable terrain: the Oyo-Zo wrangle

Tweet of the Day



Ola sees an EV route to profitability


For India’s largest homegrown ride-hailing firm Ola, simply ferrying people will not do. It’s now using the Tesla playbook to pave the path towards profitability.

Ola is building an entire ecosystem of businesses interacting with each other, CEO Bhavish Aggarwal told ET’s Alnoor Peermohamed in an interview. The company, which is building the world’s largest electric two-wheeler plant in Tamil Nadu, believes scale will differentiate it from other players in the EV market, and help it become profitable sooner.

No plans to interfere in activities of social media firms: RS Prasad

The government is not interested in interfering in the activities of social media platforms but wants to stop their “abuse” and “misuse” through a “soft-touch oversight mechanism,” IT Minister Ravi Shankar Prasad told The Economic Times.

He said the government doesn’t want to look at content or seek decryption of messages, but only to trace the origin of a message that has caused serious criminal offences.

“If people are suffering because of misuse, should they not have a forum for redressal? We are only asking for a robust grievance mechanism...," Prasad said.

Mphasis sale hits impasse on valuation issue

Negotiations between Blackstone Group and Carlyle Group for the biggest tech takeover in India have hit a bump as Mphasis’ share price continues to soar, said people involved in the matter.

Differences in valuations resulted in Carlyle walking away—at least temporarily—after emerging as the sole bidder for the Blackstone-controlled IT services company. If the impasse between two of the largest private equity groups continues, Blackstone may pull the plug on the deal, undoing a full-blown auction managed by Morgan Stanley, the people said.

Infographic Insight

ETtech

A Women Angel Network is here


Crowdfunding platform LetsVenture has launched a dedicated platform for women angel investors. The Women Angel Network is looking to have more than 100 active investors by the end of the year. The network will offer investment options of anywhere between Rs 5 lakh and Rs 25 lakh for these women investors.

Top Stories We Are Covering

WD sees surveillance, gaming as driving growth: The last 12 to 24 months have been a catalyst for digital transformation in India, driving demand across categories, digital storage firm Western Digital has said.

What’s shaping India’s digital economy? The confluence of digital content and commerce, says a report by management consultancy firm Zinnov.

Global Picks

■ NY Times faces culture clashes as business booms (Axios)

■ The robots are coming for Phil in accounting (The New York Times)

■ Imagine the Covid-19 economy before Zoom and Amazon (Bloomberg)