Daily News Digest- 19th Aug'14

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• AB Group Fined Rs150 cr Over Cash Haul in Its Office: The Aditya Birla Group continues to feel the reverberations of the controversial FIR registered in October 2013 over the allotment of a mine in Odisha to Hindalco, the group's mining arm, in 2006. In the latest twist to a tax investigation stemming from the FIR, the Settlement Commission has directed Aditya Birla Management Corporation Limited (ABMCL), an arm of the metals-to-telecom group, to pay a penalty of 150 crore. This includes tax, penalty and interest. The Settlement Commission is part of the government's Revenue Department and is a platform to resolve tax disputes. In October 2013, the IncomeTax Department had unearthed 25 crore in cash at a corporate office of the Aditya Birla Group in New Delhi. The search by the tax authorities closely followed the first information report filed by CBI against Hindalco -the investigative agency had controversially named former coal secretary PC Parakh and Kumar Mangalam Birla, AB Group's chairman, as accused -in the coal scam. Tax department sleuths are said to have shown up at the premises of the Aditya Birla Group following a tip-off by the CBI's search team. Initially, the I-T department I-T department had asked Hindalco to account 25 crore in cash. But on discovering that the money was actually seized from the premises of ABMCL and not Hindalco, the investigation focused on the former, which is a group-level think tank. From Page 1 “This is when a senior executive from the Aditya Birla Group came forward to claim that it was his money lying around in the ABMCL office while he was abroad and the search was conducted,“ said a top tax official on condition of anonymity. But the tax department has refused to close the case merely on the basis of the executive's statement.

• Indian Taxi Cos Take a Leaf Out of Uber's Book: After complaining about US-based cab-hailing app Uber's payment processes to Reserve Bank of India, Indian taxi firms appear to have come round to the view that ‘if you can't beat 'em, join 'em'. The taxi operators had complained that Uber was using an international payment gateway to get around a two-stage authentication mandated by RBI, making it possible for the world's most valuable startup (about $18 billion, or 1.1 lakh crore, at last count) to store credit card details of its clients. The Association of Radio Taxis in India, which includes large operators such as Meru Cabs, Easy Cabs and Mega Cabs, plans to set up collection offices abroad to avail the advantage of single-level authentication. Similarly, TaxiForSure, which is not a member of the body, is also planning to set up collection offices in foreign countries. Others, such as Bangalore-based taxi aggregator OlaCabs, are planning to set up mobile wallets as the battle for supremacy in India's $6-billion (36,000crore) taxi rentals market intensifies. “Uber has shown there is demand for such a (payment) service,“ said Bhavish Aggarwal, co-founder & CEO of OlaCabs, which is funded by Matrix Partners India and Tiger Global Management. “We will soon introduce alternative payment methods like Ola Money to give flexibility to consumers to pay as per their choice.“ There are about 5.5 lakh commercial cabs registered across India's top 10 cities, where these startups are present. Aggarwal, however, said cash still remained supreme. “Our in-car credit card' service pilot didn't work well in Bangalore so we won't be following that.“ Bangalore-based Taxi For Sure, another taxi aggregation startup, said it is evaluating all options to offer a seamless experience to its customers. “We want to give a choice to users,“ said Aprameya Radhakrishnan, CEO at Taxi For Sure, which has been funded by Bessemer Venture Partners, Accel Partners and Helion Venture Partners. The overall unorganised taxi rentals market is growing at 40% annually, but the startups are dwarfing it with 500% annual growth in transactions. Uber India said credit card will remain its only mode of payment for the service and maintains that it is operating under the ambit of law. “The use of credit cards and internet technologies is still not prevalent among a large section of the society, especially the smaller towns which are witnessing a lot of economic growth,“ said Sunil Wattal, a professor at Temple University in the United States. However, Indian payment gateways which could be hurt by this trend are not looking to set up offices abroad just yet. “Though it's easy for us, we won't set up international subsidiaries to route payments for our Indian customers if they move abroad,“ said Nitin Gupta, CEO of PayU India, a Naspers-funded payment gateway. “It may fall on very thin ice when it comes to legal compliance with India's laws.“

• Loo and Behold: India Inc Queues up to Invest in Toilets: Bharti Foundation, TCS pledge CSR with a Modi imprint. The prime minister's Independence Day speech exhorted India Inc to adopt the mission of providing modern sanitation facilities nationwide. Just as the IDay weekend got over, India Inc promised to spend big money to clean up India. TCS, Bharti, HUL, Aditya Birla Group, ITC, Adani and Dabur are among major companies that announced big CSR spends or promised to upgrade existing programmes for building sanitation facilities, especially for girl students and women in rural India. These announcements and promises look substantial. TCS, India's largest software services firm, said it will spend 100 crore building sanitation facilities for girl students in 10,000 schools.

• AI Express to Lease 8 Planes, to up Capacity by 4%: Air India's budget arm Air India Express plans to increase capacity and induct more aircraft to take on the competition. Besides deploying 3-4% more capacity from the winter schedule and adding another eight planes to the fleet, the airline will also focus on markets other than the already established southern region, a top official said here. Budget carriers such as Sharjah-based Air Arabia, Dubai's FlyDubai and Malaysia's AirAsia operate on most of the routes catered to by Air India Express. It also competes with domestic budget airlines IndiGo and SpiceJet.

• ITDC Posts Rs. 9.42-Crore Profit Last Fiscal: India Tourism Development Corporation (ITDC) has posted a profit after tax of Rs. 9.42 crore for the fiscal 2013-14. ITDC, a PSU under Tourism Ministry, registered a turn 469.58 crore during the same period.over of The Board of Directors, during their meeting today, also approved an annual dividend of 4.29 crore, an ITDC release said. The dividend amount is about 46% of the company's profit after tax. ITDC has been making profits for the last three years. The Board has approved the annual accounts for the financial year 201314. ITDC has introduced a performance management tool that focuses on customer, employee, internal process and financial.

• Trai Scraps Proposal by Telcos to Charge Fee: Users of WhatsApp, Viber, Skype and other apps won't have to shell out any extra charges as the telecom regulator has decided against a proposal of carriers to make companies that offer these popular services share part of their revenue with them or the government. The Telecom Regulatory Authority of India (Trai) has also shelved plans to initiate a consultation process as it feels that operators are able to offset their losses through growth in data revenue, people familiar with the matter told ET. The industry had estimated a minimum annual loss of 5,000 crore due to subscribers opting for free messenger services and voice over Internet calls. “One-third of the incremental revenue of the telecom industry is coming from data services itself. As far as the voice services are concerned, there is an upswing in the realisation rates,“ one of the Trai officials told ET, explaining the rationale for not intervening for now. “There is no proposal for a consultation paper (on regulating companies offering free messaging and calling services),“ he added. Indian mobile phone service providers, that have invested billions of dollars in creating networks, want overthe-top-players (OTTPs) to be regulated so that both parties operate on a level playing field. OTTPs are all apps that users download onto their mobile devices. Telcos have a problem with those that provide free messaging and voice calls over the Internet such as WhatsApp, Viber and Skype. Many subscribers use these apps rather than their telecom operator's normal voice call and SMS services, eating into a carrier's revenue. Operators want the OTTPs--which use their telecom networks-to pay all the fees that carriers pay to the government, which in turn will force the app makers to charge for what is currently free, bringing them on par with telcos. OTT players, however, say that any move to regulate and seek payment ¬ either to the government or to the carriers is against the concept of free Inter net or “net neutrality“. A top executive at an app maker said that if OTTPs “were forced to pay, in all probability the cost would be passed on to the users.“ Trai recently held a seminar, bringing several OTT players face-to-face with operators, setting off speculation that this was a precursor to regulating the app space in India.

• Rehan Yar Khan Raises Rs 300 cr for Maiden Fund: Angel investor Rehan Yar Khan has raised 300 crore for his maiden venture capital fund, Orios Venture Partners, underlining increasing investor interest in the start-up space. The fund, which was officially launched eight months ago, would be one of the largest risk capital pools raised completely from domestic investors. While 30% of the fund was raised from institutional investors, majority 70% of the corpus has been raised from ultra high-networth individuals (UHNIs), highlighting their rising interest in the space. “Indian investors cannot participate in new technology ventures as there are only two listed companies -Info Edge and Just Dial,“ said Khan, who founded ecommerce firm Flora2000. Other venture capital (VC) firms, which have raised money from UHNIs, include Blume Ventures, YourNest Angel Fund, IvyCap Ventures and India Quotient Fund but they have not been able to mobilise over 150 crore. More recently, former Infosys executives V Balakrishnan and Mohandas Pai-promoted Exfinity Fund made a final close at 125 crore. According to wealth managers such as George Mitra, CEO of Avendus Wealth, rising valuation of internet ventures coupled with only a few venture capital firms raising money from Indian UHNIs till date has increased interest in funds like Orios. Another aspect that is leading to higher interest is that other asset classes have not performed. “UHNIs are jaded about real estate funds as hardly anyone made money. As money from these funds is maturing, they are finding their way into other alternative assets like venture capital funds,“ said Mitra of Avendus. His firm has advised clients on investments in funds like Orios and Blume Ventures. While Khan, who has personally contributed 5% of the corpus, declined to disclose investors in the fund, promoters of a Delhi based listed auto manufacturer are said to be one of the anchors in the fund.

• Uber Tanks up on Adrenaline, to Drive into 4 More Cities: Taxi-hailing app Uber is aggressively upping its game in India by simultaneously expanding to four more cities with its premium UberBlack service and slashing prices in Bangalore by a fourth. Uber, which has disrupted the taxi market in the United States and the world over, is launching in Jaipur, Ahmedabad, Chandigarh and Kolkata, making a total of 10 cities in India in less than one year. “India is one of our fastest-growing economies and as we scale our operations these cities made the most sense beyond the first six,“ said Neeraj Singhal, head of India expansions at Uber. “Citizens of these cities have limited transportation and we want to fill in the gaps that no one has been able to address till date.“ A year ago, Uber first launched in Bangalore, followed by Delhi, Mumbai, Hyderabad, Chennai and Pune. India is Uber's largest market outside the US, where the company is growing at a scorching 30% month on month. Mumbai is Uber's fastest growing city in Asia. “The market for taxis in India is huge,“ said Sunil Wattal, a professor at Temple University in the US. “Uber can benefit both from taking market share from the existing services and also expanding the market.“ Indian taxi service providers are taking the fight to Uber by banking on their first-mover advantage and the large fleet to create a barrier. Olacabs, TaxiForSure and Meru Cabs all expanding their fleet, revamping their mobile applications and lobbying with the government to bring in parity on rules governing electronic payments. Uber, which is backed by Goldman Sachs and Google Ventures, among others, has evoked awe and fear among competitors as it grows its technology-based services across cities globally. Uber is reported to have clocked over $1 billion (Rs 6,000 crore) in gross bookings last year, with revenue estimated to be doubling every six months. Even as it drew ire from taxi unions from Paris to India, the company has pushed ahead with its international expansion and is now present in more than 160 cities globally. Uber will also slash prices of its Uber Black and Uber X service in Bangalore by 25%.“Through the Uber platform, we have created a very efficient marketplace,“ said Bhavik Rathod, general manager for Uber, Bangalore.“Thanks to this, we are able to lower prices and pass on the benefit to our riders.“ While there have been price cuts as much as 30% on UberX in other cities like New York, San Francisco, Chicago, and Atlanta, this is the first in India.

• Emami Names New Healthcare CEO: Emami has hired Ajith Babu Narasimha, former marketing director at Colgate Palmolive India, to head its healthcare division as the chief executive officer. The maker of Boroplus antiseptic cream and Fair and Handsome men's fairness cream is currently revamping its healthcare business with an aim to grow it eight-fold over the next five years with `Zandu' becoming the mother brand. Emami director Harsha V Agarwal told ET that the appointment of Narasimha is in line with the company's strategy to grow its healthcare business to 1,000 crore in five years from 125 crore last fiscal. “We plan to enter several new healthcare categories next year, both over-the-counter products and prescription-based natural products,“ he said. “All such forays will be undertaken under the Zandu brand.“ Agarwal said the new products will focus on areas such as general healthcare and digestive care. Narasimha, an engineering graduate with an MBA from IIM Ahmedabad, spent two years in Colgate Palmolive India before which he had a 22 years stint in Unilever, handling both Indian and overseas operations. Emami has been on a hiring spree in the last few months. Neeraj Chandra, former COO at Britannia, has joined as the CEO of consumer care division and his colleague Shridhar Panshikar as the sales president. HUL's erstwhile chief of innovation, technical and planning Mohan Panchabhai has joined as president (operations) at Emami. Agarwal said the recruitment of so many senior talent from the industry is to expedite the growth plans at Emami, which has ambitions to become one of the largest domestic FMCG firms in India. A recent report by brokerage Motilal Oswal said that while Emami was hitherto a niche player with presence in categories with low multinational competition and high gross margin, the company is now entering mainstream segments such as face wash, deodorants, feminine hygiene and hair oils. The report said the reason for Emami's rapid entry into several new categories is due to the vulnerability to a largely seasonal portfolio and ambition to scale up the brand and portfolio footprint.

• Issam Bachaalani New MD of Colgate India: Colgate Palmolive has elevated its India managing director Prabha Parameswaran as president of its Africa and Eurasia division. Issam Bachaalani will replace her as India head with effect from October 1. Bachaalani, who has spent over 23 years across several of Colgate's markets, is currently the oral care giant's vice-president for toothbrush division based in New York. Parameswaran, who took over as India MD just two years ago, will relocate to Switzerland, Colgate Palmolive India said in a filing to the Bombay Stock Exchange. She joins a growing league of Indians who have joined the leadership team of multinationals this year to help develop emerging markets strategy. Colgate's global rival Unilever, last week, moved Hemant Bakshi, who oversaw the home and personal care segment at Hindustan Unilever, to Unilever Indonesia as executive vice president, while its India managing director Nitin Paranjpe was promoted as global head of home care business late last year. Parameswaran’s predecessor at Colgate India Mukul Deoras too was elevated as the Asia Pacific president of the global oral care giant. Under Parameswaran, Colgate enjoyed a record 56% share in the market after increasing its revenues by more than one-third to 3,600 crore in the year ended March. However, the latest quarter ended June has been disappointing on the volume front with growth decelerating to 4%, down from 7% in the previous quarter and 9%-11% in the earlier six quarters.

• Clarks Plans to Double Stores in India: Clarks Future Footwear Ltd, a 50:50 joint venture between Future Group's Future Lifestyle Fashions Ltd and UK based footwear company C&J Clark International, plans to take its store strength to 100 over the next two years as demand grows for premium footwear brands. The joint venture, which expects revenue to touch £20 million this fiscal, recently opened its 51st store in India. Andrew Martland, president (Asia-Pacific, Middle East and Africa) at Clarks, said the company will continue its joint venture in India despite the government allowing 100% foreign direct investment (FDI) in single-brand retail. “The partnership with Future Group is the strongest we have anywhere in the world,“ Martland said from London in a phone interview to ET. “The FDI does encourage us to increase sourcing from India, which can potentially double in the near term, provided the government rationalises excise duty on premium footwear.“ Clarks currently sources most of its footwear from China and Vietnam. It sources about five million pairs of leather shoes sourced from India. Martland said Clarks is working with the shoe manufacturers' associ ation to push for rationalisation of 8% excise duty on footwear priced above Rs 1,000. In the 2014-15 Budget, the NDA government raised the limit for footwear exempt from excise duty to Rs 500. Rs 1,000 from The industry body, however, says such products account for only a small part of the market as an additional 12-15% VAT, 2-5% octroi and local body taxes increases the prices of most footwear. Martland said due to such high taxes, 30% of the Clarks shoes sold in India are locally manufactured while the balance are imported. “If the taxes are rationalised, we would increase our production in India and make it amongst one of the top sourcing markets,“ he said. Clarks will continue with its existing store format in India, which involves stores with a selling area of about 1,000 sq ft. At the same time, the company is expanding its accessories range that includes handbags, shoe care products, bags, wallets and belts, and betting on e-commerce through its own website as well as Flipkart, Myntra and Amazon.

• Steep Rentals Make India Challenging for Luxe Brands: Niche luxury brands like Italian suit maker Kiton and British shoemaker John Lobb have started bespoke made-to-order services in India, but they are in no hurry to open swanky stores in the country. Reason: inability to find a place on the right location at reasonable rates. “Rentals in India are as high as international markets, but the demand is not as much,“ said Pratik Dalmia, founder of Mumbai-based Regalia Luxury, which has the rights to market and sell Kiton and John Lobb brands in India. Steep rentals and lack of quality retail real estate at strategic locations near high-income neighbourhoods are making it hard for luxury brands to expand their business in the country in a viable manner, forcing many players to tweak their business plans and go slow. Indian metros emerged among the lowest in a recent study on luxury retail penetration in top Asia Pacific cities. Delhi, Mumbai and Bangalore rank at 25, 25 and 27, respectively, according to property consultant JLL's recent report which tracked the presence and expansion patterns of 100 top international luxury and mid-tier retailers in 30 major Asia Pacific cities. “Though rents for baseline retail properties in India are generally affordable, prime retail assets command premium rentals across Indian cities when compared to other cities in the Asia Pacific region,“ said Ashutosh Limaye, research and real estate intelligence service head at JLL India. “Given that the size of consumer spending in Indian cities is still on the threshold of growth when seen in the Asia Pacific context, the breakeven period for retailers here is discouragingly high,“ he added. Even established players like Reliance Brands, which operates a large number of stores for a clutch of big luxury brands such as Zegna and Brooks Brothers, find it challenging to justify investments. “Irrespective of the financial strength of a company, profitability is the focus. And rentals in India affect profits,“ Darshan Mehta, CEO at Reliance Brands, said. He said the hand ful of malls charge anywhere between 300 and 1,000 per square feet per month and on top of that around 50 per square feet for maintenance. Then, there is 12% service tax, Mehta pointed out. Mall operators defend their pricing, saying they are currently investing in building the right ecosystem for luxury business to flourish in an emerging market like India.

• 'The Beer Café' to open 75 more outlets in next 2 years: Beer chain 'The Beer Cafe' plans to open 75 more outlets, taking the number of shops to 100 in next two years, as parts of its plans to expand reach across the country. At present, The Beer Cafe has 25 outlets in Delhi, NCR, Mumbai, Pune, Chandigarh, among other places. "In next two years’ time, the number of our outlets will cross 100 mark," The Beer Cafe, Founder and CEO Rahul Singh said today. Asked how much investment will be required to open new outlets, Singh said on an average, an outlet requires capital expenditure of Rs 70 to Rs 90 lakh depending upon location for opening. "This fiscal, we will be opening 15 new outlets," he said. The beer chain will focus on opening its new shops at Delhi, NCR, Punjab, Mumbai, Bangalore and Chennai, he said. "In Punjab, we will add new outlets in Ludhiana, Mohali, Jalandhar and Khanna," he said. Asked about size of the market, Singh said the size of Pubs, Bars, Clubs and Lounges (PBCL) segment, under which beer business falls, stood at about Rs 8,000 crore last year and it was expected to grow to Rs 13,500 crore in next five years. Post expansion, the company eyes a topline of Rs 250 crore including 25-30 per cent sales from food. "In the current fiscal, our sales are expected to reach Rs 65 crore," he said. "It will be the only cafe in India with a range of 50 different varieties of beer from across 17 countries in the world," he said.

International:

• Britain's top bosses earn '143 times more' than staff: The heads of Britain's largest companies earned 143 times as much as their average employee last year, a study said today, exposing the growing pay gap between bosses and workers. The wage divide has nearly tripled since 1998, when the average chief executive of firms in the FTSE 100 earned 47 times as much as staff, the report found. The British government has brought in laws to curb executive pay and bonuses since the financial crisis, but a severe squeeze on wage growth has fuelled public anger about highly-paid senior executives. "When bosses make hundreds of times as much money as the rest of the workforce, it creates a deep sense of unfairness," said Deborah Hargreaves, director of the High Pay Centre think-tank, which wrote the report. The largest pay gap was at mining group Randgold Resources, where boss Mark Bristow was paid 4.4 million pounds (USD 7.36 million, 5.5 million euros) last year - 1,500 as much as his average employee. Martin Sorrell, which heads up marketing giant WPP, took home a pay package nearly 800 times bigger than his employees of 29.8 million pounds, the study found. At retailer Next, boss Simon Wolfson earned almost 460 times as much as his average worker in 2013 - but then chose to distribute his bonus to staff. The study comes after the Bank of England last week halved its pay growth forecast for this year to below the rate of inflation at 1.25 percent. Governor Mark Carney said the figures reflected "relatively unprecedented weak wage growth" in Britain.

• Dollar shop stores in three-way takeover fight: A takeover battle involving US dollar stores - discount retailers selling items at $1 - is now a three-way fight. Dollar General has entered the bidding for Family Dollar with an offer worth about $9.7bn (£5.8bn) including debt. The bid trumps an $8.5bn offer for Family Dollar made last month by Dollar Tree. Dollar stores expanded fast during the US economic downturn, but have faced competition from some of the bigger chains, including Wal-Mart. Dollar General said in a statement that a merger with Family Dollar would create a group with 20,000 stores in 46 states, with sales of more than $28bn. "For Family Dollar shareholders, our proposal is financially superior to the current transaction agreement with Dollar Tree and would provide Family Dollar shareholders with a substantial premium," Dollar General chairman and chief Executive Rick Dreiling said.

• Julian Geiger Returns as Aéropostale's CEO: It’s retailing’s latest trend — chief executives who leave and years later return to right the ship. On Monday, Julian R. Geiger, who led Aéropostale through an enormous growth period, rejoined the teen chain as chief executive officer. The move wasn’t very surprising considering in May he rejoined the board amid ongoing troubles at the retailer. “My decision to return to Aéropostale to be its chief executive officer is one that was easy to make,” said the 68-year-old Geiger, who succeeds Thomas P. Johnson. “The opportunity for sales and profit growth; the ability to reinforce the company’s special culture, and the chance to work closely with, and influence, the management team and the field organization combine to create a compelling and dynamic challenge.” Geiger was not available for further comment beyond his prepared statement.

• Mercedes guilty of price-fixing, say Chinese authorities: Carmaker Mercedes-Benz has been found guilty of manipulating the price of spare parts following an investigation by the authorities in China. The official Xinhua News Agency reports that regulators said the luxury unit of Germany's Daimler abused its control over supplies of replacement parts. The report made no mention of the likely penalty. BMW, Audi and Chrysler are also facing sanctions as part of an anti-monopoly crackdown by the authorities. Overseas companies in the pharmaceuticals, technology and food sector have also faced investigation in recent months. Last week, the European Chamber of Commerce in China said its members were "increasingly considering the question" of whether foreign companies were being disproportionately targeted.

• Tourists Buy Less Luxury in Europe: Tourists are losing their appetite for European luxury goods. According to a research note by Barclays based on the latest figures from Global Blue, which tracks tourism consumption patterns, spending in the sector was down 5.7 percent in July, with watches and jewelry declining most, down 9.3 percent. Fashion and clothing slipped 6.3 percent, while leather goods and bags fell 2.5 percent, buoyed only by improvements in Chinese spending in the category, up 6.7 percent. The note highlighted that Chinese tourist consumption in general remained weak, up 4.1 percent, which is a significant slowdown compared to the 17.7 percent rise in the first half. The fact that Chinese visitors are buying fewer luxury goods in Hong Kong does not seem to be redirected towards Europe, Barclays noted, citing the rest of the Asia-Pacific region, the U.S. and Japan as potential beneficiaries.  Spending by Russian tourists, still battered by geopolitical tensions and a devaluation of the ruble, declined less in July, down 5.9 percent versus 13 percent in June. Barclays calculated that the other nationalities slipped around 11 percent in July versus a flat figure in the previous month, which may reflect an earlier start to the Ramadan season. 

• Roberto Cavalli Fine-Tuning Deal With VTB Capital: Roberto Cavalli is fine-tuning details of the sale agreement to VTB Capital, with papers mapped out and finalized, and a deal expected to be unveiled at the end of August, according to sources. As reported earlier this month, Cavalli is negotiating to sell 60 percent of his namesake company to VTB Capital, part of VTB Group, a major Russian investment bank, for 500 million euros, or $669.8 million. The deal values the brand at 830 million euros, or $1.1 billion at current exchange. The sale is expected to close in October. While attempts to sell his company to Permira fell through earlier this year, Cavalli is said to be set on putting his signature on the dotted line this time, sources say.

Tech:

• HCL Tech Wins $32-Million Deal From Sydney Trains: HCL Technologies, country's fourth largest software services firm, has bagged a deal worth about AUD 35 million (over 198 crore) from Sydney Trains to support and maintain 107 of its business applications. Sydney Trains provides train services in the Sydney central business district and metropolitan area. It underwent a major restructuring and was formally launched on July 1, 2013, replacing CityRail as the provider of metropolitan train services for Sydney (Australia). “Under the contract, valued at AUD 34.9 million, HCL Australia Services will provide support and maintenance services for 107 business applications,“ said Sydney Trains spokesperson.

• Micromax Set to Topple Samsung in 2014: IDC: Samsung could soon lose its No. 1 position in India's handset market that it has held for just over a year to No. 2 Micromax, with the gap between the two narrowing and other Chinese and local device makers going aggressively after the entrylevel segment of smartphones, research firm IDC said. “While Samsung has held on to its leadership position in the market (in Q2), it is noteworthy that Micromax is growing faster... Given the current growth rates, there is a real possibility of seeing vendor positions change in the remaining quarters this year,“ Jaideep Mehta, vice president and general manager South Asia, International Data Corporation, said in a statement Monday. He added that Samsung needs to continue to address the low end of the market aggressively and also needs a “blockbuster“ product at the high end to regain momentum. IDC's is the third such report in the past two weeks to underline Samsung's declining market share and Micromax's growth.Earlier this month, CyberMedia Research (CMR) said that while the Korean company was still the leader, the gap between it and Micromax had narrowed sharply.Another research firm, Hong Kong-based Counterpoint Technology, flagged a change of guard, saying Micromax had replaced Samsung as the No. 1 in the handset market in India in the April-June quarter. Samsung has disputed all three reports. “We continue to lead the market and our market share, measured by offtakes, is more than double than the nearest competitor,“ Samsung India's vice-president for marketing (mobile and IT)Asim Warsi told ET on Monday, reacting to the IDC report. Earlier, responding to the CMR and Counterpoint reports, BD Park, Samsung's president & chief executive for south-west Asia, had said that they could be driven by 'business motive', and that the company was still the clear market leader. Both CMR and Counterpoint have stood by their findings. Park, though, admitted that the company's pace of growth had slowed from a few years ago due to the high base and that the large volume of shipments of its lower-priced devices had pulled down sales by value.

• JD.com, Tencent sell 574,000 smartphones in 5-day promotion: China's second-largest e-commerce company JD.com sold 574,000 smartphones in a five-day promotion offered exclusively on Tencent Holdings's Mobile QQ, the two companies said on Monday, to show their partnership has paid off. Investors have scrutinized JD and Tencent, China's biggest mobile gaming and social media company, for signs of benefits from a $215 million partnership deal, in which Tencent took a 15% stake in JD. JD aimed to gain a potent ally in its battle against Chinese e-commerce leader Alibaba Group. So far the deal has proved costly for JD. The company said last week that its quarterly losses widened due to costs related to its Tencent partnership, sending shares lower. But the two companies have touted the potential for selling JD's inventory, including big-ticket electronic devices, via Tencent's popular mobile apps such as QQ and WeChat. During the August 8-12 promotion, the Nokia XL 4G smartphone was sold only through a link within the Mobile QQ app. More than 210,000 people ordered the smartphone on the first day, JD said. The smartphone, offered by the Finnish handset maker following its acquisition by Microsoft, is now widely available in China including on Alibaba's Taobao market.

• Flipkart gets an offline retail push from employee feedback: A nudge from employees has opened up a fresh avenue of growth for e-commerce company Flipkart in the offline retail space, besides boosting internal pride in the brand. A few months ago, Flipkart opened its first brick-and-mortar store called 'Fliptomania' in Bangalore after several employees called for company-branded products on 'sticker', or employee feedback walls. Flipkart received repeated requests for company-branded T-shirts, coffee mugs and stationery. The Bangalore store is open to both employees and outside customers, and has witnessed heavy footfalls. Encouraged by this, the company is planning more such stores at its offices in Delhi, Mumbai and Kolkata, besides unveiling its branded products on its website for its employees. "Deliberately, these products come with a very nominal price tag just enough to cover the cost price," says Arathi Vedantham, director of internal communications, Flipkart. Vedantham, however, did not disclose the revenues or footfalls from the store. "These products instill a sense of pride and belonging among employees. Quirky things like even laptop stickers are a huge hit," she said. Some of the employee messages read, "Can we have more of Flipkart branded T-shirts. I want to gift these," added a company spokesperson. Outside customers contribute just 10% to the total store footfall. Building its brand has a two-fold effect on a company - it augments the market valuation and pumps up employee pride. "By owning a brand, in some cases, the market valuation of a company has risen by 1.6 or 1.8 times from its original valuation," says Harish Bijoor, brand expert and CEO, Harish Bijoor Co. Bijoor cites the examples of soap companies like Marico and Chandrika, which started out by manufacturing soaps for other companies before selling them under their own brand. The companies, he says, became very successful after introducing their own branded soaps.

• Online home-furnishings retailer Wayfair files for $350 million IPO: Online home-furnishings retailer Wayfair Inc is seeking to raise $350 million in an initial public offering of its Class A common stock, the company said in a regulatory filing. The Boston-based company owns brands such as online flash sales site Joss & Main, modern furnishings studio Dwell Studio and Birch Lane and offers more than 7 million products. It counts funds affiliated with Battery Ventures, HarbourVest Partners and Great Hill Partners among its stockholders. Wayfair, founded in 2002, intends to list its shares on the New York Stock Exchange under the symbol "W", it said in a filing with the US Securities and Exchange Commission. The filing did not reveal how many shares the company planned to sell or their expected price. The company plans to use the proceeds from the offering for investment and acquisition purposes. Goldman Sachs & Co, BofA Merrill Lynch, Citigroup, Allen & Co LLC are among the lead underwriters to the IPO. Reuters reported in January that the company is raising around $150 million in funding at a valuation of around $2 billion. Wayfair, which was previously known as CSN Stores LLC, reported a jump of 52% in revenue to $915.8 million for the year ended December 31. Net loss narrowed to $15.5 million from about $21 million. The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.