Daily News Digest- 28th Jan'15

Thought of the Day:

Today in History:

Following made the Headlines:

India:

• WC Ad Counter's Ringing at Star: Even as companies continue to debate whether to advertise their products during the Cricket World Cup or the Indian Premier League (IPL), Star Sports has signed on brands such as traditional World Cup advertiser Maruti alongside some new ones including Nestle, Raymond, Marico, Pidilite and e-commerce players YepMe.com and Paytm for the upcoming tournament. Star Sports, the official broadcaster of the World Cup in India, is hoping that its strategy of broadcasting the tournament in Tamil, Malayalam, Kannada and Bengali alongside Hindi and English will bring in a large number of new advertisers. It has signed up TI Cycles and Manappuram, for example, only for the south India market while Dixcy has decided to advertise nationally although it evinced interest only for the southern market to begin with. “Our strategy to broadcast in four regional languages will make the World Cup more accessible.Cricket, and especially the World Cup, is usually considered expensive and only very large advertisers were able to access it so far,“ said Sanjay Gupta, chief operating officer at Star India. “We are also seeing interest from brands that have not been into cricket before and contribution from these new advertisers will be very high”.

• Tata Motors to Launch Rs 7,500-cr Rights Issue: Tata Motors, India's biggest auto maker by revenue, will launch its biggest ever rights issue and the country's third biggest to pay for expansion and retire debt. Tata Motors announced on Tuesday that it intends to offer additional shares to its shareholders and raise ₹7,500 crore with the quantum, pricing and timing to be decided later. This will be This will be Tata Motors' biggest ever rights offering and the country's third biggest after State Bank of India and Tata Steel.State Bank of India, the country's largest bank, raised ₹16,736 crore in the middle of the financial crisis of 2008 but the principal shareholder, the government of India, had anchored the issue as its main promoter. Tata Steel, another Tata Sons group company, raised ₹9,134 crore soon after acquiring UK steel maker Corus Group in 2007. A Tata Motors spokesperson declined to give more details on the plans. “Rights issues convey that promoters are willing to put in money ,“ said Prithvi Haldea, chairman and managing director, Prime Database. “It reflects a commitment from promoters and is a strong signal to the market, that the company is confident about its future,“ added Haldea. Tata Motors' consolidated debt is ₹60,642 crore as of September 2014. This includes debt of Jaguar Land Rover (JLR) as well. The debt of Tata Motors' domestic operations alone is ₹17,046 crore. Tata Motors also plans to invest ₹7,500 crore in the next three years to boost capacity. Haldea said the success of the rights issue would depend on the pricing of the issue and prospects. “The price at which it is made should be attractive,“ he said. Haldea said rights issue is also a way to “reward“ a shareholder as they are given an opportunity to buy at a discount to market price.

• Gati to Raise up to Rs 120 cr for E-commerce Expansion: Logistics company Gati is raising up to Rs 120 crore for expanding its e-commerce delivery network by issuing securities to Indian or foreign investors, it said in a regulatory filing on BSE. The company said the funds will primarily be used for e-commerce expansion and also for Foreign Currency Convertible Debentures (FCCB) settlement, in a statement to ET. The company has a net debt of ₹446 crore as on 31st December 2014. The funds may come from qualified institutional buyers, venture capital funds or foreign institutional investors. Gati is embroiled in a court case in Andhra Pradesh High Court related its FCCB bonds. The investors want to covert these bonds into equity shares, which Gati is refusing to do. The company has outstanding FCCB bonds of $22 million that are yet to mature.

• Max Board Okays Plan to Demerge 3 Businesses: The board of Max India, the flagship company of New Delhi-based serial entrepreneur Analjit Singh, approved on Tuesday a plan to demerge the group’s three businesses — insurance, healthcare and specialty films — to create holding companies for each of them. These holding companies will later be listed on the Indian bourses after receiving necessary regulatory approvals. “The demerger is aimed at giving structural clarity for long-term investors,” Singh, chairman of Max India, said, after announcing the new plan. “This will help in unlocking shareholder value.” “Currently, three unrelated businesses are operating under one listed entity which was making it difficult to explain the business model to our different stakeholders,” he said. “What I have learnt in business school is that if you are unable to describe your business in one sentence, then you do not know your business,” Singh said, adding that the move will give complete clarity to the investors. ET was the first to report about the demerger plan in its January 14 edition.

• Subscribers, Data Services Drive Idea Q3 Net up 64%: Idea Cellular's consolidated net profit for the fiscal third quarter jumped nearly 64%, meeting estimates, as the nation's No. 3 telecom operator posted strong growth in subscriber additions and as higher demand for data offset pressure on its voice services. For the October-December period, net profit rose to ₹767.1 crore from ₹467.7 crore a year earlier; analysts had expected ₹765 crore. Revenue increased more than 21% to ₹8,017.5 crore. Sequentially , net profit rose nearly 1.5% and revenue 6%. “The company is well-geared to meet all volatile, uncertain, complex and ambiguous developments and remains on course of its mission to improve its market standing both in mobile voice and data business,“ Idea said in a release. The company's shares closed 1.1% higher at ₹170.35 on the Bombay Stock Exchange, in line with the broader market. The results were declared after market hours.

• Small, Medium Indian Businesses Likely to Spend $11.6 Billion on IT in 2015: Report: Most large technology companies may have so far focused primarily on bigger enterprises, but a new report from market research firm Zinnov says small and medium businesses present a lucrative opportunity of $11.6 billion (about ₹71,300 crore) in 2015 and $25.8 billion in 2020. As per the report, India has nearly 51 million such businesses, of which 12 million have a high degree of technology influence and are looking to adopt newer IT products. The report defines an SMB as a company with up to 1,000 employees. These companies will be spending on IT products that include mobility, analytics, social media and cloud in order to increase their customer reach, manage customer relationships better, and ensure efficiency in operations. The market research firm has said that although there is immense opportunity , the large IT vendors may have to fine-tune their approach towards this particular segment of the market.

• Handset Manufacturers Take PM's `Make in India' Initiative to Heart: The Narendra Modi government's `Make In India' initiative has been buoyed by handset manufacturers like Samsung and the Spice Group investments in India, which have also created potential for lakhs of jobs and billion-dollar inflows. Spice is the latest to have announced its domestic manufacturing plans in the form of a ₹500 crore unit in Uttar Pradesh, with support coming from the Akhilesh Yadav dispensation. Industry leader Samsung had also ramped up its mobile phone plant in Noida with an investment of ₹517 crore on Monday. India's third largest mobile vendor, Lava, too, will start assembling devices at its Noida factory from April and is planning to set up another factory at a cost of ₹500 crore over three years.` The Uttar Pradesh government on Monday inked multiple memoranda of understanding with Spice Group, Samsung and industry bodies Indian Cellular Association and India Electronics & Semiconductor Association. “The Make in India and Digital India campaigns ignited the confidence that last mile issues on policies should get ironed out. Inherent confidence in the industry has grown, which is why so many vendors are announcing their manufacturing related investment plans in the country ,“ Pankaj Mohindroo, president of Indian Cellular Association told ET.

• Sanjiv Puri in Spotlight amid ITC Reshuffle: ITC is grooming a set of second tier executives for leadership roles ahead of chairman YC Deveshwar's term ending in 2017, and the spotlight is on Sanjiv Puri who's now responsible for driving more than 60% of the firm's revenues and 80% of its profits. Puri, 52, last month got promoted into a newly created post of president of FMCG business, which includes the flagship cigarette business as well as packaged food, personal care and stationary products businesses. Many industry watchers believe Puri is being groomed for the top job in the long term.“ITC is known for choosing people and grooming them for bigger roles a few years in advance,“ said a top executive with a leading food and grocery retailer, adding that it's clear that FMCG is going to be the future of ITC. Two industry executives described Puri as grounded yet trade-friendly , and aggressive yet employee-friendly .

• Fearing More Layoffs: IBM India Staff still Battle Tech Blues: For employees of IBM India, once considered the jewel in the crown of Big Blue, the coming weeks are expected to bring yet more layoffs and soul-searching about the unsettled nature of working in the software industry which has helped create a new middle in India over the past two decades. Across three of the biggest offices of IBM India in Bengaluru, anxious employees are scrambling to find new jobs in IT services industry or even new careers at online retailing firms, engineering or telecommunication companies. Layoffs are not new at IBM in India--they have been a feature for about a year as CEO Gini Rometty orchestrates a restructuring which she believes will help the 103year-old company cope with the rapid changes in technology and business models. “It's a complete opposite to the emotions we had when IBM gave stock options to all employees in June 2011,“ said Shekhar (he only gave his first name to protect his identity), a former IBM employee who now works at a Bengaluru security software startup. From around 1.65 lakh employees on its payroll in 2011, IBM's India headcount is expected to slide to one lakh by March this year. Globally IBM and its units had 4.33 lakh employees at the end of 2011 compared to an estimated 4.3 lakh now, suggesting that the layoffs have been particularly severe in India.

• CarDekho Raises Rs 307 cr in Fresh Funding Round: Auto classifieds portal CarDekho.com has raised $50 million, or about . 307 crore, in a new round of ` funding led by Chinese funds Hillhouse Capital and Tybourne Capital, in yet another example for global hedge funds' increasing interest in India's consumer internet sector. With post-money valuation of about $300 million ( Rs 1,844 crore), the seven year-old CarDekho has now joined the likes of online movie and events ticketing venture BookMyShow, web and mobile classifieds company Quikr and restaurant search business Zomato in the rapidly growing club of Indian consumer internet companies valued at Rs 1,000 crore or above. “We will be using the proceeds primarily towards brand building and marketing,“ said Amit Jain, co-founder and chief executive at CarDekho.“We will consider acquisitions as well, and have held talks with other startups that we feel can enhance our technology platform,“ he added.

• Indian flyers make Dubai world's busiest intl airport: With more than a little help from Indian travellers, Dubai has emerged the busiest international airport in the world. Dubai overtook London Heathrow last year, thanks to a growth of 9.3 lakh flyers to and from the India subcontinent — which was second only to the increase of 11.9 lakh flyers the Emirate saw in passengers to and from Europe. Dubai International (DXB) handled over 7 crore international flyers last year, while Heathrow — which has been pipped for the first time ever — saw 6.8 crore international travellers. India played an important role in Dubai emerging as the busiest international airport. Dubai’s Emirates operates the maximum flights among all foreign airlines that operate to India. It has 185 weekly flights to 10 Indian cities, with the number of weekly flights set to rise to 186 from March 29.

• A fortnight after launch, Vistara load factor at 56%: Vistara, the Tata groupSingapore Airlines joint venture that started services on January 9, has recorded an average passenger load factor ( PLF), a measure of capacity utilisation, of 56 per cent, showing the competitive market it is in. Asked for details on the airline’s performance in the past few days, a spokesperson said the average PLF was 25 per cent for business class, 35 per cent for the premium economy segment and 70 per cent for the economy class. The airline’s aircraft have 16 businessclassseats, 36premium economy and 96 economy ones. Vistara’s PLF is across six daily flights on the Delhi- Mumbai route and two each on the DelhiAhmedabad and MumbaiAhmedabad sectors ( barring Sundays). By comparison, the average PLF of competitors such as IndiGo, Jet Airways and Air India across their networks this month is 75- 80 per cent, according to airline executives. “Vistara started taking bookings towards the fag end of the holiday season, after most Indian holiday travellers had already booked and business travel was curtailed. From the outset, as in other areas, our pricing strategy has been disciplined and we chose not to engage in unsustainable rock- bottom sales. Driven purely by the value proposition Vistara is offering, the initial customer response has been positive. With the holiday season now over and business travel back to normal, we have seen the market pick up and demand grow steadily,” said Giamming Toh, Vistara’s chief commercial officer.

• Samsung invests Rs 517 crore for Noida mobile phone plant expansion: Smartphone major Samsung Electronics Monday said that it has invested Rs 517 crore towards the expansion of its mobile phone plant in Noida, Uttar Pradesh under the UP Mega Policy. The expanded facility was inaugurated by Akhilesh Yadav, Chief Minister of Uttar Pradesh in Lucknow today. "Uttar Pradesh is one of the most important states for Samsung and the expansion of the Noida Mobile unit will further strengthen our presence in the country and enhance our manufacturing operations," Hyun Chil Hong, President and CEO, Samsung India Electronics, said in a statement. "The CM's trendsetter UP Mega Policy has given Samsung India Electronics the opportunity to have the state of Uttar Pradesh as a partner in its growth in India," he added. Hong said that currently over 11,000 Samsung employees are working in U.P. and the company is looking forward to create more job opportunities in the state.

International:

• Apple posts the biggest quarterly profit in history: US technology giant Apple has reported the biggest quarterly profit ever made by a public company. Apple reported a net profit of $18bn (£11.8bn) in its fiscal first quarter, which tops the $15.9bn made by ExxonMobil in the second quarter of 2012, according to Standard and Poor's. Record sales of iPhones were behind the surge in profits. Apple sold 74.5 million iPhones in the three months to 27 December - well ahead of most analyst's expectations. In a conference call with financial analysts Apple's chief executive Tim Cook said that demand for phones was "staggering". However, sales of the iPad continued to disappoint, falling by 18% in 2014 from a year earlier. The demand for Apple's larger iPhone 6 Plus model appeared to help boost profits and increase the iPhone's gross profit margin - or how much Apple makes per phone - by 2% to 39.9%. However, Apple did not give a breakdown of sales for the iPhone 6 and other models.

• Yahoo to spin-off Alibaba shares as earnings slide: Yahoo has announced a plan to spin-off its 15% stake in China's Alibaba Group and hand the business to its shareholders. In creating a separate company that is made up of its stake in Alibaba, Yahoo will avoid a large tax bill. Yahoo also reported fourth-quarter earnings of $166m (£109m), a 52% decrease from a year earlier. The company said revenue from display advertising decreased by 4% to $532m from a year earlier. However, investors were cheered by the company's decision to spin-off of its Alibaba stake. Shares in Yahoo increased by more than 6% in trading after US markets closed.

• Magnit Plans 'Aggressive' 2015 Store Opening Amid Russian Crisis: PJSC Magnit, Russia’s largest retailer, plans to strengthen its market position by accelerating store openings just as the country’s economy enters a recession. “We’ll have our most aggressive opening plan this year,” billionaire Chief Executive Officer Sergey Galitskiy said Tuesday on a conference call. The company plans to spend 65 billion rubles ($960 million) opening 1,200 convenience stores, 800 cosmetics stores and 90 hypermarkets, he said. Magnit boosted sales 32 percent last year, increasing the gap over nearest competitor X5 Retail Group NV as it added 1,600 new stores. The Krasnodar, southern Russia-based retailer expects sales growth of 26 percent to 32 percent this year, depending on market conditions, Galitskiy said.

• Selfridges to Launch Gender Neutral Retail Concept: With all the blurring of gender lines on the men’s fall runways, Selfridges is set to match that mood with a gender neutral shopping experience. From March 12, the store’s Agender project will launch as “a fashion exploration of the masculine, the feminine and the interplay…found in between,” the store said, adding that it aims to “take…customers on a journey where they can choose to shop and dress without limitations or stereotypes.” The project will span the ground, first and second floors of the retailer’s Oxford Street store here and will also showcase spaces in Selfridges’ Manchester and Birmingham stores and on its Web site. The retailer commissioned interior and furniture designer Faye Toogood to create the concept spaces, and the store will also carry Toogood’s ready-to-wear collection exclusively in the U.K.. Among the unisex lines in the store — many exclusive to Selfridges in the U.K. — will be a capsule collection by Bodymap; the U.K. launch of Nicola Formichetti’s collection Nicopanda; a collection from footwear label Underground, and Rad Hourani’s made to order couture designs. Designs by labels including Ann Demeulemeester, Comme des Garcons, Meadham Kirchhoff and Gareth Pugh will also feature in the lineup.

• French Shoppers Start Hitting the Sales Again: It seems that France is slowly returning to business-as-usual following the spate of recent terrorist attacks. Data from market-research and data-collection firm Toluna for retail trade publication LSA show that shopper footfall was picking up, especially in the Paris region, while hotel occupancy rates have shown improvement since Jan. 20, according to MKG Hospitality, which tracks daily occupancy rates in the French capital. According to Toluna, 63.2 percent of French people shopped during the third week of the winter sales period, stable compared with the prior-year period. In the Paris region, footfall increased 4 percentage points, Toluna managing director Philippe Guilbert explained, although this did not compensate for drops of 10 and 8 percentage points, respectively, in the first and second weeks of the sales.

• Peter Ruppe Joins Under Armour: Under Armour has changed its top footwear executive. The Baltimore-based activewear brand said Tuesday that Peter Ruppe has joined the company as senior vice president of footwear. He will be responsible for guiding the strategy, merchandising and development of all men’s, women’s and children's footwear. “Peter is one of the most respected and accomplished strategic leaders in the footwear space, with more than 25 years of unrivaled experience and success,” said Kip Fulks, Under Armour's chief operating officer. “He has a commanding, entrepreneurial spirit and an eye for innovation that will be invaluable to Under Armour.” Ruppe most recently served as president of Alchemy Global, an investment platform dedicated to the sports and entertainment industry. He had also spent 25 years at Nike.

• Fredrik Skärheden Named Head of Global PR for Gant: Fredrik Skärheden has been named head of global PR for Gant, a new post. He reports to Caroline Roth, who oversees the marketing, PR, store concept/visual merchandising, digital marketing, customer relationship management and media and research divisions. He joins Feb. 16 and will be based at Gant headquarters in Stockholm. Most recently, Skärheden was head of communications and regulatory affairs director at PostkodLotteriet, a lottery in Sweden. Earlier he worked at such firms as eBay, MTG and Jung Relations.

Tech:

• Facebook Outage Takes Twitter World by Storm: Facebook went down world over for about an hour on Tuesday, prompting many users to send out tweets screaming the “#SocialOutage2015”. Facebook, which has close to 1.35 billion monthly active users globally, sent automated messages to its users on both computers and mobile app that their accounts were temporarily unavailable. Photo-sharing app Instagram, also owned by Facebook Inc, too, showed that there was no internet connection. Some hackers claimed credit for the outage, but Facebook denied it. A Twitter user by the name @LizardMafia said, “Facebook, Instagram, Tinder, AIM, Hipchat #offline. More to come soon.” But Facebook developers immediately rubbished this. “Facebook and Instagram experienced a major outage tonight (Monday) from 22:10 until 23:10 Pacific Standard Time (11:40 am to 12:40 pm on Tuesday in India). Our engineers identified the cause of the outage and recovered the site quickly. You should now see decreasing error rates while our systems stabilise.

• Tim Cook: Apple Watch will ship in April: During today’s 2015 first quarter call, Tim Cook announced that the Apple Watch will ship In April. He said that development of the watch was on schedule. This comes on the heels of today’s news that Apple had a record-breaking quarter with over 74 million iPhones sold during the holiday season. Earlier rumors speculated that the Apple Watch would ship in March. When asked about his expectations on the Apple Watch, Cook responded, “My expectations are very high on it. I use it every day. I love it and can’t live without it.” The Apple Watch is Apple’s entry into the emerging wearables market. The watch syncs with a user’s iPhone and includes Apple Pay capabilities, a way to communicate with friends by drawing on the screen called Sketch and a Tap feature that sends your screen taps to a friend who is also wearing an Apple Watch.

• YouTube Now Defaults to HTML5 Player Over Flash: YouTube announced that its Web video player will now default to HTML5 over Adobe Flash to add more flexibility for developers, bloggers and consumers. The team wrote that it waited on switching to HTML5 players due to numerous technical issues. For example, HTML5 previously lacked support for Adaptive Bitrate (ABR), which helps reduce buffering. With ABR support, YouTube says it is able to use MediaSource Extensions to run smooth live streams on a variety of devices, including the Xbox One, Playstation 4, Chromecast and most popular Web browsers such as Chrome, Safari 8 and IE 11. YouTube also says that since HTML5 supports VP9 codec, it can help save bandwidth, load time and file size. The team encourages developers to start using the iframe API rather than Flash so mobile devices that do not support Flash can easily stream YouTube videos.

• Google Fiber Confirmed for 4 New Cities Later this Year: Just a few days ago we reported on rumors that Google Fiber would be coming to Charlotte and Raleigh-Durham this year. Turns out the rumors were right, but those aren’t the only cities involved. The gigabit internet service is now coming to Atlanta, GA and Nashville, TN in addition to the aforementioned North Carolina cities, making this the largest Fiber rollout so far. Google says it’s been working with city leaders over the past year in a joint planning process to build and upgrade the infrastructure necessary for the high speed connections.

• Twitter Launches Group Direct Messages: Twitter has finally added group direct messages (DMs) to its service. If you use the service as a way to privately communicate with friends, family and random celebrities, you will soon be able to communicate with more than one person (or brand) at a time. Rolling out over the next few days to all users, the group DM feature will allow users to add multiple contacts to a group chat. You can start a group chat with any of your followers, but those individuals don’t have to follow each other to participate in your chat. You’ll receive a notification when you’ve been added to a group direct message discussion.