Challenges Again For Uber and Ola, More Government IPOs and Other News

More trouble: New challenges have sprung up for the taxi app companies. A transport policy announced by the Karnataka state (the biggest market in the country for both Uber and Ola) means both the companies now have to get another license to run their business (and suspend operations until they get it). Moreover, operating under the new license rules also means no surge pricing and a cap on fares. While the rules were put in place on Saturday, the government didn’t enforce them over the weekend, because of the Indian Premier League finals, which were held yesterday in Bengaluru. More worrying for both the VC-funded companies, Karnataka could well write the playbook for other states, who are framing their own transport policies.

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Drying Up, Really? For startups moaning about lack of funding, here’s some new data to cheer you up. Data from the first quarter of 2016 shows a definite rise in funding amounts and deal sizes from Q4 2015. Startups raised $1.42 billion of funding in the March quarter, from $1 billion and the average ticket rise is also up to $8.8 million from $6.4 million. Here’s what it looks like:

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Banks Woes: After collectively reporting the worst set of results since 2001, have Indian banks effectively touched the bottom? Are things going to get better from here? Not quite, say analysts. What we just saw was a massive cleanup, where loans that were sticky and bad were reported clearly. But, fresh slippages is the new risk, they say. Already, market leader SBI announced a set of loans under “special watch” (aka “could go bad in coming months”). As they struggle for capital, which is increasingly hard to come by considering the state of their books, what happens to their ability to lend?

Related Read: How Many Indian Banks Are Swimming Naked?

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Disinvestment: This one is for the economists and stock market watchers out there. The government plans to raise 80 billion rupees from stake sales in four of its companies - Cochin Shipyard, HAL, Hudco and Rashtriya Ispat Nigam - that is - ship building, aviation, housing and steel. These names have been doing the rounds for a few years now, but the department of disinvestment has put them on the list for this year. There are still hurdles though. For instance, the defense ministry has to greenlight HAL’s stake sale, which makes military aircraft, while RINL’s valuation may be hurt by the general downturn in steel. As of now, it looks like a 10 percent sale in Cochin Shipyard through an IPO will be step one.

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A new e-commerce player: The Tata group, India’s biggest business house, had been making noises about e-commerce, but it seems like they finally took the plunge. Tata Cliq, an online apparel and electronics store was launched a few days ago. The group already has brick and mortar businesses in both these areas, but it isn’t clear if they will be part of the new venture. One thing is sure, this business requires staying power and deep pockets, both of which the group has in plenty.

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Scale back hiring: It wasn’t just Flipkart that scaled back hiring. Competitor Snapdeal has also halved its hiring plan for 2016, but there are no stated plans to cut down operations.

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Cover image: Saying no to cars and yes to sustainable transport. The Raahgiri day was celebrated in Delhi over the weekend.

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