Daily News Digest- 28th July'14

Thought of the Day:

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Following made the Headlines:

India:

• One in every 3 Apple engineers is Indian: India has become a major ingredient in Apple's secret sauce, and the scale may surprise many . It is estimated that a third of the $171-billion company's engineering staff is Indian, and that a large and increasing proportion of its enterprise software, service and support work is done by Indian IT vendors. Apple filed 1,750 H-1B applications between 2001 and 2010, but the number rose sharply to 2,800 in 2011-13. USbased HfS Research, which compiled the data, says the majority of the H-1Bs would be Indians, indicating that the iPhone and iPad maker's dependence on Indian engineers has risen significantly in recent years. 

• R-Power to buy Jaypee's hydro assets for Rs 12k cr: Anil Ambani-led Reliance Power on Sunday proved to be the proverbial dark horse, signing exclusive agreements to acquire the 1,800 MW hydroelectric power assets of Manoj Gaur-led Jaypee Group in a deal estimated at Rs 12,000 crore. The generation capacity and size of the assets being acquired make it the largest merger and acquisition (M&A) deal in India's infrastructure sector, outside of telecom. The deal was signed between Reliance CleanGen Ltd (RCL), a 100% subsidiary of Reliance Power, and Jaiprakash Power Ventures (JPVL), a subsidiary of Jaiprakash Associates (JAL) for the 100% acquisition by RCL of the entire hydroelectric power portfolio of JPVL, making Reliance Power one of the largest private power companies with 7,800 MW operating capacity by the end of fiscal year 2015. By acquiring assets worth over Rs 10,000 crore, R-Power is seen to be racing ahead of JSW and Adani Group, which were also said to be in the race for Jaypee Group's hydroelectric assets. 

• Indians dip into green tea fad, sales soar: While tea as a category has stopped growing, green tea is bucking the trend. Judging by the numbers, it could be the latest health-food craze of Indians, right up there with cold pressed oils and millets. Vikram Grover, VP and marketing head with Tata Global Beverages, which owns tea brand Tetley , says that the green tea category has been growing at around 60% yearon-year compared with black tea that is growing at around 2%. “It has become an aspirational drink for young urban Indians whose food habits are not under control,“ he says. Green tea is essentially nor mal tea that is not put through the oxidization process to keep its enzymes intact. Nutritionists tout it as an elixir for people with hectic lifestyles. For instance, medical research points out that green tea helps people lose weight and aids in digestion on top of having a positive effect on heart ail ments and type-two diabetes. 

• Cos nudge staff to spend time off work: For the harried overworked executives, there's a new trend that is going to change the way they look at “work“ and “life“ or “work-life balance“. Companies are saying no to leave encashment, which leaves no choice for employees but to exhaust the number of days off they get during a year. In effect, organizations ensure employees spend quality time off work as well. Starting this financial year, Vodafone India has revised its casual leave (CL) and privilege leave (PL) policy by doing away with CL encashment. Not only that. The telecom operator has also increased the compulsory limit for PL by four days. Godrej is another group which has removed the monetization of sick leave this year, while at Siemens, leave encashment is allowed only on retirement. 

• Avg CEO pay at top sensex cos Rs 10cr/yr: The average CEO pay at India's top listed companies has risen to Rs 10 crore a year, but still remains less than one-tenth of over Rs 100 crore median remuneration paid to their peers in the US. The top executives of the country's biggest bluechip companies, forming part of the stock market's 30-share benchmark index sensex, were paid an average remuneration of Rs 9.9 crore in the latest fiscal 2013-14 -up from about Rs 8.5 crore in the previous year. In comparison, the average CEO pay for the companies forming part of the US stock market's 30-share benchmark index DJIA (Dow Jones Industrial Average) stood at $17.5 million (Rs 105 crore) during the last year. The corresponding figures for the UK and Germany stood at about Rs 60 crore and Rs 50 crore, respectively , in 2013 -which are also significantly higher than the Indian average. 

• Premji Jr to be at Wheel of Wipro's Venture Arm: Wipro is setting up a corporate venture arm to be spearheaded by Rishad Premji that will initially invest up to $100 million (.`600 crore) in startups to help the country's third-largest soft ware exporter fill the missing in novation strand. This first-of-its-kind venture arm by an Indian outsourcer to be over seen by Rishad, son of Chairman Azim Premji, underscores the company's recognition to exist ential threats faced by traditional IT companies from startups fo cused on disruptive technologies, including data analytics and machine-to-machine learning, said people familiar with the development. Globally , some of the big gest technology names such as Intel, Cisco and Dell have dedicated corporate ven tures for investing in star tups and mature ideas that are disruptive. 

• A Rs 1,000 Haircut is Now Child's Play: Sunscreens, perfumes, special light fixtures, pricey hair clippers, expensive haircuts — there’s a whole new consumer class for these. And the consumer age group? 5-10 years. Kids-only products and services that were once always bought by and for adults are the hottest new market trend in India. Like their consumers, these markets are as yet small but they are delightfully promising and growing fast. 

• Merc Turns on Style with Compacts, Closes in on Audi: Volume growth and market share have always prompted car companies to drive hard and the Indian luxury space is witnessing some fierce rivalry as Mercedes Benz is inching close to its global rival Audi with a close finish expected in the next few months, as both companies tune their compact models to gain the edge. Sales of Mercedes Benz are spiralling on the back of compact hatch models like the A and B Class, while Audi is introducing its first compact sedan, the A3, next month to challenge the rival's hatch tango. While both companies are tightlipped about their annual sales targets, Mercedes Benz, with sales of 4,717 cars in the first half -a 25% growth over last year -seems to be closing the gap. Audi India refused to disclose its sales figures for the period, but people in the know said that it may have sold a little over 5,000 vehicles in the first six months. 

• Pro Kabaddi League Already a Hit on Twitter, Facebook: Kabaddi, a traditional Indian sport that had almost disappeared from Indian cities, is back -not just in metros and on television, but in the cyberspace as well. As soon as Pro Kabaddi League (PKL), the first initiative to commercialise kabaddi in Indian Premier League style, kicked off in Mumbai on Saturday , it became one of the most talked-about events on social network sites such as Twitter and Facebook. Twitter saw more than 6.05 million tweets sent about the game on different hashtags in just 12 hours of the broadcast of the event. Similarly, on Facebook, in just 12 hours of the broadcast of the event, 3500 new fans were added, and over 30,000 people posted about the event. 

• Delhi-based Mydala in Talks to Raise Rs. 180 Cr: Delhi-based deals startup Mydala is in talks to raise funding of about $30 million, or ` . 180 crore. Marquee investment firms Warburg Pincus and Temasek are among those in talks with the company, said a person with knowledge of the discussions. The company declined to reveal the names of the investors they are in talks with. “We are speaking to multiple potential investors,“ said Arjun Basu, cofounder and chief financial officer of the Info Edge-backed company. Warburg Pincus and Temasek did not respond to emails till the time of going to press. Warburg Pincus is an investor in classifieds site Quikr. Temasek recently invested in online marketplace Snapdeal. Earlier this year Temasek subsidiary Vertex Venture Management invested in online babycare firm Firstcry. Kinobeo Software, which runs Mydala, has so far raised `. 28 crore primarily from owner Info Edge, which owns 47% stake in the firm. 

• More Oracle Offices to Outsmart Competition: Oracle is looking to have branch offices in all Indian state capitals as part of its plan to boost business while some of its larger competitors deal with problems of their own. Oracle, founded by technology billionaire Larry Ellison, counts companies like HP and IBM as its major competitors. HP is going through a restructuring exercise that may see as many as 50,000 employees cut from its ranks. Separately, IBM has struck a deal to sell off its x86 server business as it focuses on higher margin products. 

• Wal-Mart seeks to grow footprint in India: Wal-Mart Stores Inc.’s Indian arm is looking to expand its wholesale or cash-and-carry business in Himachal Pradesh, Haryana, Jammu and Kashmir, Uttar Pradesh and Andhra Pradesh, among others, a person familiar with the matter said. On 21 July, The Economic Times reported Wal-Mart was investing an additional Rs.623 crore in India. Filings with the Registrar of Companies show the company has invested almost Rs.2,000 crore in its Indian operation this year. Since terminating its joint venture with Bharti Retail Ltd, the world’s largest retailer has said it will focus on wholesale and expand its network in the country. In April, Krish Iyer, chief executive officer Wal-mart India Pvt. Ltd said in a press note that the firm will open 50 more cash-and-carry stores in India in the next four or five years. Wal-Mart currently has 20 cash-and-carry stores in India. 

• VLCC to invest over Rs 300 crore in 3 years to fund expansion: Beauty and wellness firm VLCC plans to invest more than Rs 300 crore over the next three years to fund expansion in domestic as well as international markets. The Delhi-based firm, which posted revenues of Rs 1,000 crore last year, is also targeting a turnover of Rs 3,500 crore in the next three years. 

International:

• Bose Sues Beats over Headphone Noise-cancellation Patents: Bose Corp filed a patent-infringement action seeking to block US imports of noise-cancelling headphones made by Beats Electronics, the company being bought by Apple. The Beats Studio and Beats Studio Wireless headphones use technology covered by five patents, Bose said in a complaint filed with the US International Trade Commission (ITC) in Washington on Friday. A mirror civil suit, filed on Saturday in federal court in Wilmington, Delaware, makes the same allegations and is likely to be put on hold while the ITC case is pending. 

• BSkyB in £5bn deal to create Sky Europe: BSkyB is paying £4.9bn to take over Rupert Murdoch's pay TV companies in Germany and Italy. The move was announced along with the company's annual results, which show pre-tax profits fell slightly to £1.2bn from last year's £1.26bn. BSkyB also reported revenues rose by 7%, with strong demand "across the board" for its services. It said Sky Sports viewing share was at a seven-year high, boosted by the open race for the Premier League title. Part of BSkyB - 39% - is owned by Rupert Murdoch's 21st Century Fox. That company owns 100% of Sky Italia and 57% of Sky Germany. 

• Mark Sebba to Retire as CEO of Net-a-porter Group: Mark Sebba will retire as chief executive officer of Net-a-porter Group later this week, the company confirmed on Sunday. Sebba joined Net-a-porter in 2003 and focused his efforts on building and enhancing the global infrastructure, the company said. While his last day is Thursday, the company said he will remain as a non-executive director. He will also continue to provide strategic counsel as the group expands internationally, and will ensure a smooth handover. A process to identify his successor has already begun, the company confirmed. 

• German Consumer Morale Hits 7-Year Peak: German consumer morale rose to its highest level in more than 7-1/2 years heading into August as shoppers became more upbeat about their future income prospects than at any point since 1991, a survey showed on Friday. Market research group GfK said its forward-looking consumer sentiment indicator, based on a survey of around 2,000 people, climbed to 9.0 going into August from 8.9 in July. That was the strongest reading since December 2006 and was higher than the Reuters consensus forecast for 8.9 — a positive sign for domestic demand, on which the government is relying to drive growth this year as exports are seen remaining weak. 

• Study Finds Shoppers Prefer Brick-And-Mortar Stores to Amazon and EBay: Take warnings that Amazon, Ebay and other online and mobile commerce outlets could render brick-and-mortar retailers virtually obsolete with a heaping chunk of salt. When it comes to consumer shopping desires, the store’s still the thing. That’s the key takeaway from the A.T. Kearney Omnichannel Shopping Preferences Study. The management consulting firm surveyed 2,500 shoppers from a cross section of demographic groups, including teens, Millennials, Generation X, Baby Boomers and senior citizens. One of the most eye-opening findings: “Ninety percent of shoppers surveyed would prefer to buy in a brick-and-mortar store across demographic and age groups,” Mike Moriarty, a partner in the retail practice of A.T. Kearney, and co-author of the study, told Forbes. And for pretty simple reasons. “They love going out, shopping with people and touching stuff,” Moriarty said. “Everybody likes going shopping.” Indeed, despite the hubbub over digital commerce, 94% of total retail sales are still generated at brick-and-mortar stores, according to data from market research firm eMarketer. 

• LG’s Snappy G3 Phone Is Poised to Test Rivals: LG Electronics has a strong product on its hands with its new smartphone, the LG G3. It is a powerful phone with a beautiful display, great camera and a pleasant, uncluttered Android operating system interface. But will enough people notice? Smartphone headlines are dominated by Apple and Samsung, and few customers in the United States think of LG as a maker of high-end phones. They should. Last year’s LG G2 was a good phone that got people’s attention, and the LG G3 could make the company a serious challenger. It features the same top-of-the-line processor found in the Samsung Galaxy S5 and the HTC One (M8), its top Android competitors, and it does not skimp on any specifications. The price of the LG G3 ranges from free to $200 with a new contract, depending on your carrier, or just under $600 with no contract. It is available on all four major carriers in the United States; all offer it in black or white except Sprint, which offers it in black or gold. 

• JD.com to Sell Microsoft's Xbox One Games Console in China: JD.com Inc, China's second-biggest e-commerce company by market share, will accept pre-orders for Microsoft Corp's Xbox One games console in China from July 28 to July 30, the firm said on Monday. The pre-orders will be taken via Tencent Holdings' mobile social networks Mobile QQ and WeChat, known as Weixin in China, JD.com said in a statement. Tencent holds a 17.6 percent stake in JD.com. The Xbox One will be the first gaming console to be released in mainland China since the government banned console sales in 2000, citing games' effects on mental health.