Softbank to deliver for Swiggy? TATA looking to disrupt India Inc. Jap tonic for Sun Pharma. & more, in today’s de-ravelled shot of Headline news.

SOFTBANK HAS SWIGGY ON RADAR

Softbank Investment Advisers is expected to greatly enhance its India focus in the coming years. It had a roadmap of investing US$ 10 billion within a period of 10 years in the country, and has already invested US$ 7 billion in four years. The investment firm has reportedly hired Sumer Juneja, a seasoned venture capitalist and partner at Norwest Venture Partners, who is on the boards of startups like Swiggy.

With rumours doing the rounds that Softbank is looking to invest in Swiggy as opposed to Zomato, Juneja’s association with the food-delivery firm may come in handy. It may be noted that Juneja had led Norwest Partner’s first investment into Swiggy in 2015. Softbank has been looking to make an investment in Swiggy over the past year, but talks have not materialised into an investment during the previous two funding rounds. An investment from Softbank will be a strong boost for Swiggy, considering the huge amount of losses it is taking to drive growth in a hugely competitive market. The company’s revenues reached Rs 468 crore in FY 2017-18, while losses almost doubled as compared to the previous fiscal to reach Rs 397 crore. Swiggy has received US$ 465.5 million in consolidated funding through 8 funding rounds as on date.

INDIAN ECONOMY EXPECTED TO HAVE DECELERATED IN Q2

India’s GDP growth is expected to have slowed down during the quarter ending September 2018 to 7.5-7.6%, according to a research report by SBI. The report cites slowdown in rural demand as the main reason for this deceleration. In comparison, GDP growth at constant prices (2011-12) for the previous quarter (ending June 2018) was 8.2%.

The SBI Composite Leading Indicator, which is a basket of 21 leading indicators, shows a declining trend for Q2, meaning that gross value added (GVA) for the quarter would be at around 7.3-7.4%. While rural demand has been slowing, the report also states that commercial vehicle sales, domestic air passenger traffic and cement production have been able to retain double-digit growth during the quarter. However, the month of October is showing a slowdown in demand, in particular for non-food credit, bank deposits and sales of passenger and commercial vehicles. Another factor impacting growth is the slowdown in government spending for the second quarter.

 TATA GROUP BRACES FOR DIGITAL DISRUPTION

The era of startups, backed by millions of dollars in funding, is leading to major disruptions in the business world, especially due to digitalisation. Legacy business houses are aligning their organisational DNAs to cope with this change. Tata Group Chairman N. Chandrasekaran has laid out a strategy to make the US$ 100 billion conglomerate more digitally savvy.

A spate of hiring for new tech talent has been initiated in the past 18 months , which includes Vijaya Deepti (CEO, Tata IQ); Deepak Konnur (Chief Digital Officer, Tata Power); Rino Raj (Chief Information and Digital Officer, Tata Chemicals); Gopinath Jayaraj (Chief Information Officer, Tata Motors); Jayanta Banerjee (Chief Information Officer, Tata Steel); Abonty Banerjee (Chief Marketing and Digital Officer) & Mani Mulki (Chief Information Officer) at Tata Capital. Conscious efforts are being made to leverage digital technology to grow businesses where possible and also to make functions more efficient. The scope of entering new sectors digitally and developing technology platforms is also being explored.

SUN PHARMA ACQUIRES POLA PHARMA

Indian pharmaceutical major Sun Pharma has acquired Japanese firm Pola Pharma for US$ 1 million. The deal is part of the company’s plans to strengthen its presence in the dermatology segment. Pola Pharma is part of the Pola Orbis Group and is involved in R&D, manufacturing, sale and distribution of both branded and generic products with dermatology being the focus area.

The company has an annual revenue of US$ 108 million, and owns two plants in Saitama, Japan for manufacturing of topical products and injectables. The valuation of Pola Pharma is on a debt-free and cash-free basis. It had a consolidated net loss of US$ 7 million in calendar year 2017.  Sun Pharma expects that this acquisition will strengthen its presence in the Japanese market, which it entered in 2016 with the acquisition of 14 prescription brands owned by Novartis for US$ 293 million. These brands had an aggregate net revenue of US$ 160 million. The Japanese pharma market is pegged at US$ 84.8 billion or 7.5% of the global pharma market.

AUTOMOTIVE AFTER MARKET PROJECTED TO REACH RS 75,000 CRORE BY 2020

A CII report has projected that the automobile aftermarket in India, which has grown at a CAGR of 14% over the past five years, should reach a size of around Rs 75,000 crore by 2020. Around 75% of the potential in this market is contributed by Tamil Nadu, Andhra Pradesh, Karnataka and Kerala.

The report adds that with the number of vehicles set to increase by 6-7% in the coming year, there is huge opportunity for current and new entrants in the aftermarket segment. Due to low manufacturing costs, India also has huge potential as an export hub for auto parts. Furthermore, the National Electric Mobility Mission Plan (NEMMP) 2020 has a target for 400,000 battery electric cars (BEVs) by 2020. The new mobility solutions market could grow to around US$ 2 trillion by 2030, with US$ 1 trillion expected to come from the taxi sector alone according to the report.

Quote of the day:

“I don’t believe in taking right decisions. I take decisions and then make them right.”

Ratan Tata