Govt. rejects Flipkart’s proposal for entering food retail sector

Commenting on the development, a company spokesperson said that Flipkart intends to re-apply for the permit

The Department for Promotion of Industry and Internal Trade (DPIIT) has rejected Walmart-backed Flipkart’s proposal seeking approval for entry to the food retail sector citing a regulatory issue, an official said on Monday.

The government permits 100% foreign direct investment in food retail for food produced and manufactured in India.

Last year, the company had set up a new local entity — Flipkart Farmermart — to focus on food retail in India, and had applied for requisite licences from the government.

Flipkart Group CEO Kalyan Krishnamurthy, at that time had said that the move an important part of the company’s efforts to boost Indian agriculture as well as food processing industry in the country.

“Yes, the department has rejected the proposal,” the government official said.

Commenting on the development, a company spokesperson said that Flipkart intends to re-apply for the permit.

At Flipkart, we believe that technology and innovation driven marketplace can add significant value to our country’s farmers and food processing sector by bringing value chain efficiency and transparency. This will further aid boosting farmers’ income and transform Indian agriculture.

We are evaluating the department’s response and intend to re-apply as we look to continue making significant impact on small businesses and communities in India,” the spokesperson said.

Interestingly, Amazon had received the government’s nod for its $500 million investment proposal for retailing of food products in India in 2017.

Grocery segment accounts for a significant portion of the unorganised retail segment in the country. Estimates suggest the market to be worth over $200 billion in India.

The grocery segment has witnessed significant growth amid the COVID-19 pandemic. Many people turned to e-commerce platforms like Grofers, BigBasket and Amazon India for their grocery purchases during the lockdown as they looked at maintaining social distance.

Market watchers feel that grocery segment would continue to scale in the coming months in view of the COVID-19 situation.

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Capgemini’s Delaporte to take over as Wipro CEO and MD

Frenchman had spent 25 years with the consulting firm

Wipro Limited on Friday appointed Thierry Delaporte as its new CEO and MD. The appointment is effective from July 6.

In a regulatory filing, Wipro said: “Until recently, Thierry Delaporte was the chief operating officer of Capgemini Group and a member of its group executive board. During his 25-year career with Capgemini, he held several leadership roles including that of the CEO of the global financial services strategic business unit, and head of all global service lines. He also oversaw Capgemini’s India.”

Mr. Delaporte will be based in Paris and report to chairman Rishad Premji. The company’s current CEO and MD Abidali Neemuchwala will relinquish his position on June 1.

Commenting on Wipro’s new French connection, global analysts who know Mr. Delaporte, say: the new leader comes with a strong finance background and he will be able to bring operational and financial discipline at Wipro. They also said that culture too won’t be a big challenge for Mr. Delaporte as he worked with several companies of diverse cultures, although culture fit’ is a major `concern’ and `criteria’ for CXO selection for many family-driven businesses in India as well as globally.

Thierry is a global leader and has worked with multiple cultures, across different types of companies. He has experience in the international environment and worked in similar types of company cultures,’’ said Ray Wang, principal analyst, founder and chairman of Silicon Valley-based Constellation Research Inc,. Commenting on the appointment, Peter Bendor-Samuel, CEO, Everest Group, said, “[Mr.] Thierry is an interesting choice for Wipro, signalling its move to be a true multinational and global player. [Mr.] Thierry faces many challenges as he assumes Wipro leadership; the biggest amongst them is to get Wipro back to industry-leading growth. To achieve this, he must increase accountability, and streamline decision making.”

Phil Fersht, CEO and chief analyst at London-based HFS Research, said, “He is an ambitious business leader with a strong finance background. He will bring strong operational and fiscal discipline to Wipro and has a lot of energy and leadership capabilities.”

As per analysts, everything has quickly changed, in a post pandemic world, including market realities, business challenges, customer needs and work culture and with these also changed the role, priorities and focus of global tech leaders.

On the priorities in front of Wipro’s new leader, as per analysts, the challenges going forward are to bring the vast elements of Wipro together onto accounts. There are many opportunities for multiple teams to work with clients at the same time and gain synergies.

This requires a relook at how industries are organised as they get collapsed post pandemic. For example, manufacturing, retail, and distribution are very similar today just like telecom, media, entertainment, and technology. Those collapsed value chains will change how companies like Wipro service these industries,’’ added Mr Wang. According to Mr. Fersht, Thierry has an immediate challenge of creating a renewed strategy for Wipro and bringing in some new leadership in various areas. “He will likely look to restructure the firm as it seeks to develop a “digital workplace” delivery model for the post-COVID environment that caters for intense cost pressures, remote staff and rapid transformation that many clients demand.”

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Uber India to lay off 600 people

Company employs about 2400 people in the country.

DivaCab aggregator Uber on May 26 said it would lay off about 25% of its employees in India due to the negative impact of COVID-19 on the business.

The company employs about 2,400 people in the country.

The move comes close to the heels of the other major cab aggregator, Ola, letting go about 1,400 employees. Other technology led firms, such as Zomota, Swiggy and ShareChat have also announced layoffs and salary cuts due to the pandemic.

“The impact of COVID-19 and the unpredictable nature of the recovery has left Uber India SA with no choice but to reduce the size of its workforce… These reductions are part of previously announced global job cuts this month”, Pradeep Parameswaran, president, Uber India and South Asia said in a statement.

Around 600 full-time positions across driver and rider support, as well as other functions, would be impacted, he added.

Earlier this month, the U.S.-headquartered company announced a reduction of its customer support and recruiting teams by approximately 3,700 full-time employee roles “due to lower trip volumes and our current hiring freeze”.

“Today is an incredibly sad day for colleagues leaving the Uber family and all of us at the company. We made the decision now so we can look to the future with confidence. I want to apologize to departing colleagues, and extend my heartfelt thanks to them for their contributions to Uber and the riders and driver partners we serve in India,” Mr. Parameswaran said.

Uber India said each affected employee would receive a minimum 10 weeks payout, medical insurance coverage for the next six months, outplacement support, be allowed to retain their laptops and given the option to join the Uber talent directory.

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Aditya Birla MF suspends fresh inflows into two debt schemes

Fund house does not want to dilute them as ‘significant gains have been made’

Aditya Birla Sun Life Mutual Fund has temporarily suspended fresh investments in two of its debt schemes — Medium Term Plan and Credit Risk Fund —with effect from Friday.

The fund house said that it had made significant gains in the two schemes, which would be realised by existing investors, and hence has stopped fresh investments so that the gains are not diluted.

“We have stopped taking additional money in our credit oriented funds —Medium Term Plan and Credit Risk Fund,” the fund house said in a statement on Thursday.

“We believe that there are substantial gains in our funds which would be realised by the existing investors over the next few months. Since we do not wish to dilute this for existing investors by taking more money in these funds, we have stopped fresh subscriptions in these funds,” it added.

While the Medium Term plan is an open-ended debt scheme that invests in instruments with a maturity period between three to four years, the Credit Risk Fund predominantly invests in AA and below rated corporate bonds.

The cumulative assets under management (AUM) of the two schemes is around ₹5,000 crore.

It is believed that the move is to ensure that the incremental gains from some of the written down assets go to the existing investors while barring new investors that invest just eyeing the recent gains.

Meanwhile, the fund house’s decision will not impact existing systematic investment plans (SIPs) and systematic transfer plans (STPs). Only fresh registrations will be barred.

Incidentally, the development comes close on the heels of Franklin Templeton Mutual Fund announcing the winding up of six debt schemes with a combined AUM of ₹26,000 crore due to an illiquid market for low rated securities.

The ongoing coronavirus pandemic has significantly affected the cash flows of most corporates that, in turn, has impacted the payment capabilities especially those with a lower rating.

Further, given the bleak outlook, the market for low rated papers has become illiquid.

However, after the Franklin Templeton MF announcement, industry body Association of Mutual Funds in India (AMFI) had said that it was a one-off instance and not an industry-wide phenomenon.

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IndiGlobe eyes Virgin Australia

IndiGo Airlines, till recently, had denied any role in bid for grounded carrier

InterGlobe Enterprises Ltd., which owns over 37% stake in IndiGo Airlines, has submitted a bid to acquire Virgin Australia airlines, which had filed for bankruptcy protection on April 21, 2020 after going down with an over $7 billion debt and a very little amount of cash.

“As regards Virgin Australia, InterGlobe Enterprises has signed an agreement to participate in the sale process, and is bound by the confidentiality requirements of that agreement,” an InterGlobe Enterprise spokesperson said.

“We are unable to say anything further at this stage,” the spokesperson added.

Virgin Australia, founded as Virgin Blue in 2000 by British billionaire Sir Richard Branson, was one of the first casualties of COVID-19 that caused large scale grounding of aircraft as different countries imposed travel restrictions.

Deloitte is conducting the bids and reportedly eight bidders, including InterGlobe, have submitted bids by Friday.

The rest include Brookfield, Queensland’s investment firm QIC, private equity firm BGH Capital, Bain Capital, and mining baron Andrew Forrest. The three top bidders will be short-listed next week.The airline, Australia’s second largest, has a fleet of 98 aircraft and used to operate to 56 destinations before it went down.

Existing shareholders

Its existing shareholders include China’s Nanshan Group, HNA Group, Singapore Airlines, Etihad Airways and Sir Branson’s Virgin Group with 10% equity stake.

IndiGo started commercial operations in 2007, and since then has emerged as India’s biggest airline with nearly 50% domestic market share. IndiGo is one the world’s best run low-cost profitable airlines. It had recently denied any role in the bid.

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Abiomed To Not Provide FY21 Outlook; Acquires Breethe – Quick Facts

While reporting its financial results for the fourth quarter of fiscal 2020 on Thursday, Abiomed, Inc. (ABMD), a provider of medical devices, said it will is not providing fiscal 2021 revenue or operating margin guidance at this time due to the uncertain scope and duration of the COVID-19 pandemic.

The company said it is taking proactive actions to mitigate the business impact of COVID-19 to better match expenses to revenue in the first quarter.

These actions taken include a hold on hiring, eliminating non-critical consultants, contractors, and temporary workers, reducing discretionary spending and implementing alternate work schedules for the Aachen and Danvers production teams.

In addition, Abiomed’s CEO and COO have reduced their salaries by 100 percent, while VPs and directors have reduced their salaries by 50 percent and 20 percent respectively for the first quarter. The board of directors have also reduced their cash retainers by 50 percent for the first quarter.

Non-director employees at the company’s Massachusetts and German headquarters will take a minimum of one-week furlough or unused vacation. The commercial field team will work on monthly operating plans to allow for flexibility and the potential to increase sequentially each week, Abiomed said.

On Wednesday, Abiomed announced its acquisition of Breethe, developer of a novel extracorporeal membrane oxygenation or ECMO system that will complement and expand Abiomed’s product portfolio to serve the needs of patients whose lungs can no longer provide sufficient oxygenation.

This includes patients suffering from cardiogenic shock, cardiac arrest or respiratory failure such as due to ARDS, H1N1, SARS, or COVID-19.

Additionally, ECMO has been utilized as a primary method of oxygenation and hemodynamic support for pediatric patients. Breethe has applied for 510k clearance by the U.S. Food and Drug Association or FDA.

Abiomed did not disclose terms of the acquisition.

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Trump’s order no threat to IT sector: Nasscom

Will lobby for critical tech staff, it says

U.S. President Donald Trump’s order banning immigration under various categories to the U.S. for 60 days need not be seen as a negative sign for the Indian IT sector, said Nasscom.

The sector’s apex body also said it would make strong recommendations to the U.S. administration to consider critical technology workers from India under the essential category, complying with the guidelines released by the Cybersecurity & Infrastructure Security Agency (CISA), an arm of the U.S. Department of Homeland Security.

It’s too early to see any impact on the Indian tech sector, but what came out is the first executive order speaking about permanent immigrants, green card holders and also about people who are outside of the country, Shivendra Singh, vice- president and head, immigration, Nasscom, told The Hindu.

However, the order will not apply to the more than six lakh Indian H-1B visa holders and their spouses who are currently in the U.S, he said, adding “there’s no immediate effect, still we will have to see how these numbers pan out in the future. But the key issue is the exemption to certain categories including healthcare workers, who are critical and essential to helping both American people and the US economy recover during these trying times.’’

The apex body said it was extremely supportive of the executive order, however added the U.S. should give access to Indians who are working in healthcare as well as essential technology workers who are also playing a key role in maintaining critical infrastructure in hospitals, industries, online education sector and the likes in the U.S. The category should also include people who are actively involved in efforts to develop treatments and cure for COVID-19 and other diseases, it said.

”We believe that critical tech workers should also be considered as essential workers. In the order, there are directions given to the Department of Labour and Department of Home Security to come back in 30 days with subsequent policy recommendations for non immigration and other category workers and H-1B, L1 and L2 visas fall into it. In fact, CISA itself has given examples of jobs and employees that are essential and this can be an ideal guideline to decide who is essential,” added Mr. Singh.

In introducing the guidance, CISA stated: Functioning critical infrastructure is imperative during the response to the COVID-19 emergency for both public health and safety as well as community well-being. Certain critical infrastructure industries have a special responsibility in these times to continue operations.

”We believe that DHS has provided an excellent roadmap for any subsequent potential recommendation for Non-immigrant and other visa categories,” Nasscom added.

Commenting on the immigration scenario, Stella Nagesh, an immigration professioal based in Bengaluru, said the pandemic was likely to increase visa rejection rate to a much higher levels.

”We already hear about cases techies’ visa extensions denials in the last few days and more such incident are expected. This year we saw how the traditional quota system was broken and replaced with a random selection process. Visa rejections have been on the rise in the last couple of years and in 2019 itself more than one third of applications were rejected by U.S. Citizenship and Immigration Services,’’ added Ms. Nagesh.

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EQT Corp. Reports Q1 Preliminary Sales Volume Exceeding High End Of Range

EQT Corp. (EQT) on Thursday provided certain preliminary first quarter 2020 operational and financial highlights, along with an update on its outlook and deleveraging plan. The company said it has experienced limited operational impacts as a result of the COVID-19 pandemic.

For the first quarter, EQT reported preliminary sales volumes of 380 Bcfe to 385 Bcfe, exceeding the high-end of the guidance range of 360 Bcfe to 370 Bcfe.

In October 2019, EQT announced a deleveraging plan to reduce debt by about 30 percent, or approximately $1.5 billion by mid-2020 through asset monetizations and increased free cash flow.

The company noted that its deleveraging plan contemplated generating targeted proceeds from monetizations of select, non-core exploration and production assets, core mineral assets and the company’s retained equity interest in Equitrans Midstream.

EQT said it is in advanced talks to divest certain non-strategic assets principally located in central Pennsylvania for an anticipated sales price of about $125 million.

Given current market conditions and EQT’s expectation that natural gas prices may improve further starting in the latter half of 2020, the company intends to more selectively explore non-core asset sales and opportunistically assess monetizing its remaining equity interest in Equitrans Midstream Corporation in a strategic manner instead of attempting to fully achieve its deleveraging plan by mid-2020.

EQT expects the combination of the anticipated proceeds from these asset sales, anticipated income tax refunds of approximately $390 million, in part accelerated by the CARES Act, and improved realized free cash flow amounts from accelerated well cost reductions will be sufficient to enable the company to repay or refinance its debt maturing in 2021 by the end of 2020.

EQT noted that the impact of recent world developments in 2020 on natural gas prices and its business are unpredictable. There is no assurance that natural gas prices will remain at recently elevated prices or that any positive impact from the oil price war will outweigh the negative impact from reduced demand for natural gas due to COVID-19 or other factors.

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Coronavirus | India Inc. stands by lockdown extension call; seeks stimulus package to rebuild economy

Prime Minister Narendra Modi extended the lockdown till May 3 saying it is necessary to contain the spread of the novel coronavirus in the country

India Inc. on April 14 said the nationwide lockdown extension was necessary to avert a humanitarian crisis, but insisted on the need for a stimulus package to rebuild the economy hit hard by the COVID-19 pandemic.

Data | How quickly are coronavirus infections and deaths increasing in India, compared to the rest of the world?

Earlier in the day, Prime Minister Narendra Modi announced that the current lockdown will be extended till May 3, saying it is necessary to contain the spread of the novel coronavirus in the country.

He said detailed guidelines on implementation of the new lockdown will be announced on April 15, and some relaxations may be allowed after April 20 in places where there are no hotspots.

The catastrophic effect of the lockdown on the overall economy and livelihoods of lakhs of migrant workers triggered severe concerns following which a number of State Chief Mministers in their video conference with Mr. Modi on April 11 sought some sort of relaxation for a number of sectors.

State Helpline numbers for COVID-19 | e-Book on COVID-19 | Coronavirus, April 13 updates

Late last month, the government announced a ₹1.7 lakh crore package aimed at providing relief to those hit hard by the lockdown as well as an insurance cover for healthcare professionals handling virus infected people.

“Estimates show that India may be losing close to ₹40,000 crore daily due to the national lockdown with an estimated loss amounting to ₹7-8 lakh crore during the past 21 days,” said FICCI president Sangita Reddy.

Further, it is also expected that close to 40 million jobs are at risk during the period April-Sept 2020. Hence, an urgent relief package is also critical, she said.

She observed that the Prime Minister’s directions on graded opening will help start some production activity to ensure that as soon as lockdown opens, there are no shortages faced.

Also read | Cabinet approves ordinance to reduce salaries of PM, Ministers, MPs by 30% for a year

CII director general Chandrajit Banerjee said the COVID-19 curve trajectory as of now required a fitting containment response and Prime Minister’s decision for continuation of the lockdown is necessary to avert a larger humanitarian crisis.

“Prime Minister has also provided a guidance on exit from the lockdown after 20 April which helps industry plan better,” Mr. Banerjee said.

“The extension gives the government adequate preparation time to organise an orderly and safe restart of the economy as and when health conditions permit. Industry too can devise its strategies for commencing operations accordingly duringthis extension period,” Mr. Banerjee added.

Assocham secretary general Deepak Sood said the situation is quite challenging, but somehow, the industry is managing to stay afloat and pay salaries and other essential disbursements in the supply chain.

Also read | Govt. may have to present second Budget to deal with COVID-19 aftermath, says Jairam Ramesh

“However, the situation may become unsustainable in the coming weeks, making it extremely important for the government to announce an effective and sizeable package for the economy,” he stated.

According to PHD Chamber president D.K. Aggarwal, a significant stimulus of 7% of GDP would help the economy to grow at around 5% in the current financial year 2020-21, rejuvenate the businesses and refuel the economic growth trajectory of the country.

IT industry body Nasscom said the extension announcement by the government will help India to build on the containment strategy of the last three weeks and strengthen our readiness to support the post lockdown phase.

Watch | Impact of COVID-19 on the global economy

“We are also happy to note the relaxation of restrictions in green zones and hope the government will also announce the economic stimulus packages soon so that we can start focusing on rebuilding the economy. Saving lives and livelihood has to go hand in hand, ” it added.

Ratul Puri, Chairman Hindustan Power, said while lockdown and social distancing are the only two remedies for fighting the pandemic, there is a widespread impact on the businesses and the overall economy.

“Extension of lockdown is a well thought out and much-needed plan in wake of the threats posed by COVID-19. Prime Minister’s decision to monitor the effectiveness of implementation and then gradually offer relaxations post 20 April must be welcomed,” said Naveen Jindal, Chairman, Jindal Steel & Power Limited.

The lockdown that came into effect on March 25 was to expire on midnight of April 14.

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Uber partners with Flipkart to deliver everyday essentials in Mumbai, Bengaluru and Delhi

Uber will not charge any commission, enabling drivers to keep 100% of the billed amount

After bigbasket and Spencer’s Retail, ride-hailing Uber has now partnered with Walmart-owned Flipkart to provide people in Bengaluru, Mumbai and Delhi access to everyday essentials amid the nationwide lockdown.

Last week, Uber had said two-wheelers (UberMoto) and four-wheelers (UberGo and UberXL) and their network of driver-partners on its platform will help support delivery of essential supplies safely to consumers’ doorsteps.

“We are pleased to announce our partnership with Flipkart today to further consolidate our new last-mile delivery service. The partnership helps keep the economy running and enables Indians to stay at home in line with government guidelines for containing Covid-19, as well as creates earning opportunities for drivers,” Uber India and South Asia Director-Operations and Head of Cities Prabhjeet Singh told PTI.

Uber will not charge any commission, enabling drivers to keep 100% of the billed amount, he added.

Through its partnership with bigbasket, Uber is delivering to customers in Bengaluru, Hyderabad, Chandigarh and Noida.

Mr. Singh explained that the partnership with Flipkart will keep vital supply chains running and address the needs of customers to receive essential goods at their doorsteps every day.

“It will also support the government’s objective of keeping hundreds of millions of Indians at home to contain the spread of COVID-19,” he added.

Masks, gloves for drivers

Mr. Singh, however, did not comment on the number of driver-partners who are helping in carrying out these e-commerce deliveries.

In line with the government guidelines and to maintain safety and hygiene for containing the spread of Covid-19, all drivers associated with this service are being provided masks, gloves, sanitisers and safety training, Mr. Singh said.

“This partnership is to help move essential supplies from our sellers/ vendors to customers in the shortest possible span of time. Flipkart remains committed to supporting our customers and we are mobilizing all possible options to ensure that in this national fight against Corona, we can support the governments, by delivering essential supplies to people who are staying indoors,” Flipkart Chief Corporate Affairs Officer Rajneesh Kumar said.

E-commerce companies have been struggling to deliver orders since the government ordered 21-day lockdown on March 24 to contain the spread of coronavirus. Even though the government allowed delivery of essential goods, including food, pharmaceuticals and medical equipment through e-commerce, players had complained about their delivery staff being hassled by police.

With local authorities shutting down warehouses and stopping trucks from crossing State borders, e-commerce players have seen their operations getting disrupted. The companies have resumed operations and working to complete pending orders.

Flipkart had temporarily suspended operations last week and later resumed services the same day after assurance of safe passage of its supply chain and delivery executives by local law enforcement authorities.

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