Tesla may bring its cars to India this year
Responding to a query on Twitter on 7 February, Tesla Inc. chief executive Elon Musk stated that the company may introduce its cars in India in the Summer of 2017. Some Indians have already booked its much-awaited Model 3 car by paying an advance of $1,000. This list includes Vijay Shekhar Sharma, founder of Paytm (One97 Communications Ltd); Mahesh Murthy, Mahesh Murthy, managing partner of venture capital firm Seedfund; Vishal Gondal, founder and CEO of wearables firm GOQii; and Sujayath Ali, chief executive of Voonik. Sales of electric vehicles in India increased 37.5% to 22,000 units in 2015-16.
Cognizant bows to activist investor pressure
Pressured by activist investor Elliott Management Corp., Cognizant Technology Solutions Corp. has agreed to appoint three new directors and return $3.4 billion to shareholders over the next two years through share buybacks and dividends. The company’s shares rose 4% on the NASDAQ after the move. The company will return 75% of free cash flow to investors from 2019, as opposed to current values of about 30%. It also plans to improve margins to around 22% by 2019, and invest in digital services to drive growth.
SoftBank writes off $475 million investment in Ola, Snapdeal
Japanese investor SoftBank Group Corp. has written off around $475 million (Rs3,226 crore) in the value of its two largest investments in India, Ola (ANI Technologies Pvt. Ltd) and Snapdeal (Jasper Infotech Pvt. Ltd). At the end of December 2016, SoftBank recorded a loss of 39,281 million yen in the company’s investments, primarily in India, despite foreign exchange gains worth 16,133 million yen. The investor had recorded profit of 108,426 million yen in the year-ago period. SoftBank had invested $210 million in Ola and $627 million in Snapdeal in October 2014. The markdowns comes at a time when both companies are in talks with investors to raise money.
Government tightens the noose around Vijay Mallya
United Breweries (Holdings) Ltd on Wednesday asked absconding liquor baron Vijay Mallya to immediately step down as non-executive chairman of the company. A day later, the government of India handed over a formal request to the British High Commission for his extradition from the UK. UB Group’s move follows a ruling last month by the Securities and Exchange Board of India (Sebi) barring Mallya and six former United Spirits Ltd executives from using the securities market for alleged violations of the listing agreement, diversion of funds and fraud.
RBI holds rates
The Reserve Bank of India (RBI) on 8 February left the repo rate unchanged at 6.25%, citing inflation concerns over rising crude prices and exchange-rate volatility. The central bank’s monetary policy committee also shifted the policy stance from “accommodative" to “neutral", in a move that marked the end of a two-year easing cycle. The committee also cited other concerns that influenced its move—namely an ongoing assessment of the effects of demonetisation on inflation, and the output gap (the difference between actual economic growth and potential economic growth).
Tata Steel posts strong performance
The past week was eventful for Tata Steel Ltd. The steelmaker posted its first profit in five quarters—reporting a consolidated net profit of Rs231.90 crore in the three months to 31 December, compared with a net loss of Rs2,747.72 crore a year ago. Revenue increased 14% to Rs29,391.60 crore from Rs25,766.89 crore a year earlier. The turnaround reflects strong performance by its Indian business. Higher steel prices on the back of government stimulus in China helped counter weak sales in Europe. In another development, the company’s UK subsidiary on Thursday sealed an agreement to sell its specialty steel business to Liberty House Group for $125.55 million.
Kumar Mangalam Birla may head Vodafone-Idea merged entity
Aditya Birla Group chairman Kumar Mangalam Birla is emerging as the candidate-of-choice to head the Vodafone India and Idea Cellular combine, according to two people familiar with the merger talks that are currently in the preliminary stage. The combined entity would likely have 12 directors on its board: three each from the two companies and six independent ones, according to the two people cited above, who requested anonymity. The choice of Birla would also help Vodafone Group dispel any doubts about the degree of its control over the merged entity.
Passenger vehicle sales hold up despite demonetisation
Sales of passenger vehicles, including vans, cars and utility vehicles, grew 14.4% to 265,000 units in January from the year-ago period, according to data compiled by industry body Society of Indian Automobile Manufacturers (Siam). However, sales of two- and three-wheelers continued to fall. Two-wheeler sales declined 7.39% to 1.26 million units and three-wheeler sales fell 28.2% to 31,345 units. The numbers reflect wholesale figures (company dispatches to dealerships) and not sales to end users. Industry experts are of the opinion that two-wheeler growth is essential for the auto industry to grow at 10%.
Alastair Cook resigns as England captain
Alastair Cook, who led England as captain for the most number of Tests, resigned on Monday. England’s most prolific Test batsman with 11,057 runs in 140 tests, Cook will be remembered best for his two Ashes victories against Australia. The resignation comes in the wake of a poor show by England last year—the team lost eight out of 17 tests in 2016, including the first test defeat to Bangladesh. Cook said he had pondered over this decision since England’s 4-0 Test series loss to India.
VC investments off to a slow start
Venture capital (VC) investments were off to a slow start this year. Though the number of investments in January rose year-on-year, the amount invested fell 55%. Tencent Holdings Ltd’s $55 million investment in healthcare start-up Practo Technologies Pvt. Ltd was the largest investment in January, followed by PremjiInvest’s $25 million in ID Fresh Foods. CapitalG (formerly Google Capital) and Sequoia Capital India put in $15 million education start-up Cue Learn. In total, VC companies made 40 investments worth $211 million in the entire month.