Monthly Archives: February 2017

German healthcare giant Merck partners with Bengaluru lab

Bengaluru: Bengaluru-based STEER Engineering, which specialises in materials transformation, has announced a research collaboration with German healthcare and life sciences firm MerckBSE -3.83 %, to create co-rotating twin-screw extruder technology to process special effect pigments for the plastics industry.

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Processing special effect pigments, which is used to add glitter in cosmetics, fashion industry, apparels and paints, is still a major challenge for the plastic industry, as the pigment loses its platelet structure in the processing stage, according to experts.

1mg CPA INSTEER labs will carry out the research work in Bengaluru to overcome the challenge, and both the companies will validate the tests before launching the tech platform, according to Babu Padmanabhan, STEER managing director & Chief Knowledge Officer.

STEER, with manufacturing locations in Peenya, Bengaluru and Coimbatore in Tamil Nadu, has 60 global patents for its innovations. The 175 crore by revenue company, has presence in teh US, Europe, China and Japan, works with major plastic compounders.

Merck, a leading company in INThealthcare, life science and performance materials, generated sales of € 12.85 billion in 66 countries. “The research collaboration is an acknowledgement of our capabilities and technology by a global leader,” Padmanabhan said. “Our rich legacy of research and patented technologies will complement the objectives of this unique venture,” he added.

Source: India in Business: February 22, 2017

Future group joins hands with UK’s Laura Ashley for selling its merchandise in India

Mumbai: Kishore Biyani’s Future group has partnered UK clothing and homeware retailer Laura Ashley that runs about 450 stores globally and Future will have exclusive rights to make and sell merchandise as well as wholesale distribution in USA, LLC

While Laura Ashley, which was well known in the 1980s for its floral dresses, has a clothing line as well, Future Group has signed the licensing deal for its larger business – home furnishings.
“We are trying to bring aspirational products within Home-Town as there is enough potential in the market. We are reworking on a strategy for specialty business and will partner or bring more global brands in the category,” Future Group CEO Biyani said. “We will also house the brand within department store Central and open at least 15 stores in the next few years.” INT
About a year ago, Future Group acquired FabFurnish and said it will spin it off with furniture retail format Hometown to create a separate listed entity with target revenue of Rs 1,000 crore.

While three-fourths of the furniture and home-furnishings industry in India is controlled by standalone stores and carpenters, nearly half a dozen ecommerce players, including Flipkart and Amazon, have entered the market in the recent past. Hometown has 37 stores at present. Global giant Ikea will open its first Indian store this year in Hyderabad and plans to open 25 stores — each large enough to fit about four football fields — in the country by 2025. USA, LLC
Rising demand for high value items that offer big margins is driving foreign interest towards India’s furniture industry, market experts said.

Havells buys Lloyd’s consumer durables business for Rs1,600 crore

Havells’ board approves the acquisition of Lloyd’s consumer durables business; deal proposed to be executed on a debt-free, cash-free basis

New Delhi: Lighting and electrical appliances company Havells India Ltd on Sunday said it will acquire the consumer durables business of Lloyd Electrical and Engineering Ltd, run by the B.R. Punj Group, for Rs1,600 crore.

Havells signed the deal with Lloyd Electrical and Engineering and Fedders Lloyd Corp. Ltd, as some of the consumer durable brands are co-owned by the two companies promoted by the B.R. Punj Group.

Havells Fusion 2 900mm Matte Finish Ceiling Fan (Pearl Ivory and Brown)

Source: Livemint: February 19, 2017

Ola, Uber see rides rise fourfold in 2016: report

Ride-hailing firms Ola and Uber together completed about 500 million rides in 2016, up from 130 million a year earlier, says RedSeer report

rollback04_gen_120X90.gifNew Delhi: Ride-hailing services Ola and Uber together clocked a nearly fourfold increase in the number of rides booked through their platforms in 2016 from a year earlier, according to a report by market research and advisory firm RedSeer Management Consulting Pvt. Ltd.

Every Day Low Prices at Wal-Mart USA, LLCOla (ANI Technologies Pvt. Ltd) and Uber Technologies Inc, together completed about 500 million rides in 2016, as against about 130 million rides the year before, according to the study. While Ola and Uber did not comment on the numbers, industry and company executives said Ola clocked about 6 million weekly rides on an average between September and December last year across its offerings of cabs, autorickshaws and shuttle buses.

Uber India president Amit Jain said in an interview in September that Uber’s completed trips had risen from 1.6 million in January 2016 to 5.5 million at the end of August.

Mint could not independently ascertain the number of rides clocked by Uber.

“One of the big things which happened was ride sharing. That was one of the fastest growing sections within the overall cab aggregator segment. Since the costs came down, even people who could not afford a cab, started getting one. The second big trigger was aggressive marketing in cities beyond the top three markets, which are Bengaluru, Delhi and Mumbai,” said Anil Kumar, chief executive of RedSeer.

According to industry executives, Ola was a clear leader until late 2015, when Uber turned on the heat with reduced fares and cash payments.

Jain, a former executive who assumed charge of Uber in India in June 2015, said in the September interview that Uber had clocked 165,000 trips a week in January 2015. This implies that Uber grew 33 times in the 20 months between January 2015 and August 2016.

“Uber is growing in India by investing in engineering and technology to ensure we continue excelling where it matters, such as delivering the best experience to riders and drivers and ensuring that cars arrive quickly and reliably. We are delighted to see how ride-sharing is benefiting riders, drivers and cities across India,” an Uber spokesperson said in an email response.

An Ola spokesperson cited several third-party reports published in 2015 and one published in May 2016 to claim that Ola “consistently serves more than 78% cab users in India. Ola’s monthly active users is at least 70% more than Uber’s monthly active users consistently.”

The online ride-hailing market in India has been exploding at the same time. The country of 277 million internet users, which in the first quarter of 2014 was barely a blip in the global market for cab aggregators (in terms of rides), grew into the third biggest market after China and North America in the first quarter of 2016, according to the Internet Trends 2016 report by Mary Meeker, partner at Silicon Valley venture capital firm Kleiner Perkins Caufield and Byers.

Besides, after Uber sold its China business to Didi Chuxing in August, India has become for Uber what it is for another American tech giant, Amazon—a market it cannot afford to lose.

Industry experts say Ola pulled away from its rival after launching Micro, a low-cost offering, in March last year. However, the success of Micro also proves that a change in prices dramatically affects business. “It is pretty much a price game now. There are elite segments which have a view on services, but apart from them, consumers largely look for a cheaper option and that is the only criteria for them. Uber has been aggressive with prices last year. That’s why Ola launched Micro to match the prices and gained some market share. But Uber has stronger financial muscle. If Ola raises another round, they will give a good fight as well,” said RedSeer’s Kumar.

Uber’s most affordable offering, UberGO, is priced at Rs7 per km in Bengaluru, Rs6 per km in Delhi and Rs8 per km in Mumbai, while Ola’s cheapest service, Micro, costs Rs6 per km in all three cities.

According to the RedSeer customer preference index, a survey of 3,107 consumers in more than 12 cities shows Uber has been gaining popularity. While customer preference for Ola surged in the quarter ended March 2016 following the launch of Micro, Uber turned around in the second half.
The customer ride preference index score for Ola dropped from more than 70% in the March quarter last year to less than 60% in the December quarter, the report said.

To be sure, both Ola and Uber have rolled out new services to attract more consumers. While Uber rolled out hourly rentals earlier this month, Ola has been at it since June. In May, it had also launched inter-city cab booking. Apart from this, in an attempt to nurture a loyal customer base, Ola launched a monthly subscription service called Select, where subscribers get a preference in cab allocation and are not subjected to surge pricing, among other benefits.

The company also launched a so-called connected-car experience, called Ola Play, in November last year, where consumers can listen to music or watch videos in tablets installed in the cars.

Source: India in business – February 17, 2017

Tata Motors partners with Microsoft for new car products

First Indian OEM to tie up with the tech giant for new products

rollback04_gen_120X90.gifMumbai: Within two weeks of announcing an open platform strategy for developing passenger cars, Tata Motors Thursday said that it has tied up with global technology giant Microsoft to improve the in-car connected experience.

Life is Feudal INT

TAMO, the open platform from domestic automaker allows collaboration with various technology partners to launch low-volume niche products that can prove Tata Motors product development capabilities. This is a part for revamping product strategy of the company for the passenger car segment to safeguard itself from competition coming from technology giants such as Google and Uber. INT

“We are using Microsoft’s connected vehicle technologies on Azure intelligent cloud to bring the digital lives of our customers into the cars they drive,” said Guenter Butschek, CEO & MD, Tata Motors. The company will use Microsoft’s connected vehicle technology along with AI (artificial intelligence, machine learning and IoT (internet of things) capabilities. INT

Microsoft announced the technology platform last year while announcing a similar partnership with Renault-Nissan. The platform is powered by Microsoft Azure, a cloud computing service for building, deploying, and managing applications and services through a global network of Microsoft-managed data centers.

Other global automakers including Toyota, Ford also have similar technology tie-ups with Microsoft to develop technology-enabled new products. But in India Tata Motors is the first company to do so.

“We Expect 90% of new cars to be connected by 2020,” said Anant Maheshwari, president, Microsoft India. “Using IoT, AI and machine learning technologies, we will provide vehicle owners in India and across the world with a safe, productive and fun driving experience,” said Maheshwari.

Tata Motors said that the first automobile with the enhanced experience will be showcased at 87th Geneva International Motor Show in March 2017. Tata will incorporate Microsoft’s functionality in its user interface app and services suite.

The companies also detailed some of the features including the suggestion for restaurants, shopping and route assist tips for driver depending on the location and their profile. The platform will also provide timely alerts about the condition of the car to ensure that it is well maintained to minimise breakdowns.

Azure will enable FOTA and SOTA updates (firmware and software updates) in addition to the control of settings remotely over the cloud. The more the people use the platform, the more amount of data is captured and analysed, making it an improving experience for everyone.

Warburg negotiates to buy up to 40 per cent stake for Rs 2,300 crore of Tata Tech

Mumbai: Private equity firm Warburg Pincus is in advanced negotiations to acquire asignificant minority stake of up to 40 per cent in Tata Technologies for around Rs 2,300 crore, ending months of talks, said several people with knowledge of the matter.

The engineering design services company has been looking to offload 26-40 per cent of equity at a valuation of Rs 5,400 crore ($800 million) for almost a year and a half, said the people cited above.

It had also considered selling a majority stake to investors and an initial public offering, they said. “Warburg is the only investor with whom the Tatas are currently engaged,” said one of the persons.

“It will be interesting to see if Tatas give a revenue commitment for the future. The worry is the industry still looks at the company as a quasi-captive unit.”

A formal announcement is said to be imminent. The Singapore-headquartered company was founded in 1989 as a subsidiary of Tata Motors before becoming a standalone entity. Tata Motors still owns around 70 per cent of the company.

Second-Largest Shareholder

Tata Group entities such as Tata Capital and senior executives own 17 per cent while the rest is held by outside financial investors.

If a deal takes place, the new investor will likely become the second-largest shareholder after Tata Motors while existing ones like Tata Capital are likely to cash out, either in part or fully, said the people cited above.

The company says it’s a leader in “engineering services outsourcing and product development IT services to the global manufacturing industry” and looks to “apply cutting-edge technology to provide a competitive advantage to customers in the manufacturing sector”, according to its website.

More than half its turnover and a bigger share of profit come from Tata units, particularly Tata Motors and its Jaguar Land Rover (JLR) division. A third of its revenue comes from North America, Europe and the Asia-Pacific.

Nearly 65 per cent of its business comes from the automotive sector, 12 per cent from aerospace and the rest from industrial machinery and other businesses.

The company has been trying to increase its aerospace portfolio, especially in defence, as a de-risking strategy. Growing at a compounded annual growth rate of 16 per cent, the company is targeting $800 million (around Rs 5,300 crore) in revenue by 2020, $200 million of that through acquisitions.

In 2015-16, its consolidated revenue was Rs 2,714 crore and profit after tax was Rs 382 crore. A Warburg spokesperson declined to comment. “As stated before, from time to time, we review the performance of our non-core assets and companies and see how we can monetise them,” a Tata Motors spokesperson said.

“We do not have any additional comment to offer at this point of time.” Tata Motors has already announced annual capital expenditure plans of Rs 3,500-4,000 crore for the next three years, mainly to spruce up and strengthen its passenger car range.

JLR is to spend 3.5-4 billion pounds on capex. There was no response to emails sent to Tata Technologies CEO Warren Harris or the company’s spokesperson.

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Other contenders

Carlyle, Apax Partners, the Canada Pension Plan Investment Board (CPPIB), Government of Singapore Investment Corporation (GIC) were all said to have previously evaluated the company but eventually opted out.

The initial valuation expectation of $1 billion was also a spoiler for most. The Tata Group had mandated Citi to find a strategic partner for the company.

“There is growing interest for businesses that provide solutions to the aerospace and defence sectors both from strategic investors as well as financial sponsors,” said Sanjeev Krishan, partner at PricewaterhouseCoopers. INT
“As automation increases, the need for technology solutions will increase leading to the attractiveness of such businesses from an investor’s standpoint.”

Warburg, among the earliest PE investors in India, successfully exited its investment in QuEST Global Services Pte, another engineering solutions provider, last February.

Bain Capital, GIC and Advent International cumulatively invested $350 million to pick up minority stakes. Warburg, which has deployed $3.8 billion in 51 companies in India since 1997, is looking to deepen its involvement, co-chief executives Charles R Kaye and Joseph P Landy told ET in a recent interview.

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It plans to invest $8 billion in India over the next 10 years — twice what it did in two decades — as the New York-headquartered firm extends its long-term bet on one of its “most important markets in the world”. Last month it invested Rs 840 crore in PVR for a 14 per cent stake. Tata Motors’ third-quarter profit plunged 96 per cent to Rs 112 crore from the year earlier because of losses in the domestic business and operational weakness in JLR.

Source: Economic Times – February 16, 2017

Modern retail to touch Rs1,71,800 crore by 2019: Report

Penetration of modern retail is expected to see a substantial rise from the current 19% to 24% in three years as per the report jointly authored by Knight Frank India and RAI
Adidas CPA

These six markets include NCR (national capital region), Mumbai, Chennai, Bengaluru, Pune and Hyderabad.

Netmeds IN INTMoreover, with initiatives like foreign direct investment (FDI) retail policy and state-level retail policies where “government is taking up the role of a facilitator to create an environment conducive to the retail business” has further helped the cause.

While brands like GAP, Woodland and Bestseller India-owned Jack & Jones, Vero Moda, Only & Selected Homme are following the same strategy, there are others like Swedish fast-fashion brand Hennes and Mauritz AB (H&M) who have decided to focus on just offline stores right now.

Cairn India to invest $1 billion in five projects to ramp up production

Cairn India’s investment, however, is subject to the production-sharing contract of the Barmer oil and gas block in Rajasthan CPA

Sundaram Clayton to invest in US plant; expand in India too

Chennai: Automotive castings company, Sundaram Clayton, part of the TVS group, on Thursday said it was investing $50 million to set up a greenfield factory in the US, in sync with Trump administration’s call to set up factories in America. In addition, the company has announced a Rs 400 crore expansion plan for its Indian operations.

“This is our first overseas venture,” said Lakshmi Venu, joint MD of Sundaram Clayton. The plant will come up in Dorchester county in South Carolina across 50 acres. It will make high pressure die cast and gravity cast parts. Construction at the site is expected to begin by April and first production would be ready for roll out by end of 2018.

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She denied it was after US president Trump’s protectionist policies. “We have been planning for the past two years, We are following our clients who want changes to our existing supply chain,” she said. Changing automotive dynamics are forcing companies to shorten supply chains. There will also be benefits on carbon footprint for the company. INT

Sundaram Clayton will also expand its capacities across its four plants in India. “We will invest nearly Rs 400 crore in the next three years for our Indian operations,’ Venu said.

She said all the funding required for both projects would be through a mix of equity and debt. Upon completion of expansion, the Indian operations can make 70,000 tonnes of aluminum castings, up from 60,000 tonnes. “We are very bullish on India story. Between 2011-12 and 2015-16, we have completed an investment of Rs 408 crore in adding capacities across the three Chennai plants and one Hosur plant,” she added.

The company, which ended March 2016 with revenues of Rs 1,523 crore said its export basket contributed to 40% of total revenues of which 60% of the exports were to the US.

Sundaram-Clayton is a manufacturer of aluminum die cast products catering to the automotive industry.

It is part of $7 billion TVS group, one of the largest automotive and automotive component manufacturing and distribution groups in India, besides being the holding company for two wheeler maker TVS Motor.

Source: India in Business; February 13, 2017

Amazon India top seller Cloudtail’s revenue rises fourfold to Rs4,600 crore

Cloudtail India is a joint venture of Inc. and Infosys Ltd co-founder NR Narayana Murthy’s Catamaran Ventures.

Cloudtail India ended 2016 with revenue of Rs4,591.2 crore, compared with Rs1,145.4 crore in the year-ago period

Bengaluru: Cloudtail India Pvt. Ltd, a joint venture between Inc. and Infosys Ltd co-founder N.R. Narayana Murthy’s Catamaran Ventures, posted a fourfold increase in revenue in the year ended March 2016 and received fresh funds amid a market-share battle between Amazon and FLIPKART.