World’s Largest Ecommerce Deal is Now a Reality; India's Flipkart Acquired by Walmart for $16 Billion

One of the world's largest e-commerce deal was finally announced culminating deal between Walmart and Flipkart that began in September 2016 with Walmart’s plans to pick a minority stake in Flipkart.

Walmart Inc. on Wednesday announced its high profile acquisition of Flipkart for $16 billion for a valuation of over $20 billion, making it the largest ecommerce acquisition in the world. The Bentonville company has acquired 77% of the Bengaluru-based company.

This is also the largest buyout for the US company with its biggest bet ever in online space and on India, underscoring the growing digital consumption potential in a country of 1.3 billion.

The Wednesday announcement culminates discussions between Walmart and the Bengaluru company that began in September 2016 with Walmart’s plans to pick a minority stake in Flipkart. The talks pivoted earlier this year towards the world’s largest retailer acquiring Flipkart.

The deal, which will see founder Sachin Bansal exit completely, will now pit US-based giants Walmart and Amazon in the Indian market, which experts say will help in growing the share online retail.

“This allows Walmart to jump into a high-growth market, and results in two global players focusing on the growth of the Indian ecommerce market,” said Prasanto Roy, vice-president of NASSCOM’s Internet council.

“The ecommerce fight ahead should be less about market share than about growing the market manifold.”

The deal is also expected to generate wealth in crores of rupees for founders, investors as well as several employees.

“The distribution of wealth will be inspiring. We haven't had such as situation since Infosys. It will inspire many more Indians to take the entrepreneurial path in the coming years,” said Vani Kola, managing director of Kalaari Capital.

Walmart intends to keep the current management of Flipkart and the Bengaluru team will report to Marc Lore, CEO of Walmart’s US e-commerce, whose company Jet.com was acquired by Walmart for $3.3 billion in August 2016.

Amazon founder Jeff Bezos had committed $5 bn to India, and the investments in its India business are expected to cross the mark soon.

The Amazon marketplace business in India alone has received over Rs 20000 crore , with significant investments also going into its cloud business and the newly launched food retail segment. Overall, the Walmart-Flipkart deal is expected to be a good boost for the ecommerce sector and may bring in some rationality, according to Sanjay Sethi, CEO of ShopClues.

"Walmart is a long-term player, and it might bring in more rationality into the market,” Sethi said.

Finally Flipkart Board Clears 75% Stake Sale Deal with Walmart for $15 Billion

After months of negotiations, the US global retail giant Walmart Inc has been able to strike a deal with Flipkart, India's most valuable startup. According to a Bloomberg report, Flipkart Online Services Pvt has approved 75 per cent stake sale to Walmart for $15 billion.

Tech giant Google's parent company Alphabet Inc would also tag along with Walmart for an investment in Flipkart. As per the deal, SoftBank Group Corp, which is one of the biggest investors in Flipkart, through its Vision Fund, would sell its 20-plus per cent stake in the company for around $20 billion valuation. 

The report claims the deal can't be called certain, and that terms could change in the next 10 days. The US retail giant was in talks with Flipkart for around a year to acquire a controlling stake in the firm as it looks to take on rival Amazon.com Inc head-on in India, a market where e-commerce is tipped to grow to $200 billion in a decade. Experts say the Amercian company could bag four of the 10 seats on Flipkart's board.

Some of Flipkart's main investors - US hedge fund Tiger Global Management, South African tech investor Naspers and venture capital firm Accel - are likely to retain small stakes, the report said.

Currently, SoftBank and Tiger Global own little more than 20 per cent each of Flipkart, Naspers holds nearly 13 per cent stake, Accel 6.4 per cent, while the Bansals own just over 5 per cent each of the company.

On May 3, world's biggest e-commerce player Amazon, which is Flipkart's main competitor in India, had made a counter offer to Flipkart to buy a 60 per cent stake in the company. The deal offered by the Jeff Bezos-run company proposed to merge Flipkart entirely with its Indian arm and sought a non-compete agreement with Flipkart's founders for 1-2 years.

However, the Flipkart board's decision to take the Walmart offer will make it easy to get the regulatory approval. Any Flipkart-Amazon deal would have come under the scanner of the competition watchdog given their dominant market share - around 70 per cent collectively - in the Indian e-commerce market.

Once the acquisition process is complete, Flipkart's Executive Chairman Sachin Bansal may hang up his boots after taking company to new heights in the past 10 years, reports suggest.

Bangalore-Based Vijaya Bank Records Net Profit Up 1.6% at Rs 207 Crore

Public sector lender Vijaya Bank on Monday reported a 1.6% increase in net profit at Rs 207.31 in the fourth quarter of 2017-18 compared with Rs 203.99 crore in the same quarter a year ago.

However, for Fiscal 2017-18, the bank's net profit came down to Rs 727.02 crore compared with Rs 750.48 crore in the previous fiscal.

The bank's total income during the quarter grew to Rs 3,728.22 crore as against Rs 3,504.73 crore in the year-ago period.

In a regulatory filing, the bank said that its provisioning for non-performing assets for the quarter stood at Rs 552.91 crore as against Rs 344.56 crore in March quarter of 2016-17.

The bank informed the exchange that the Board has recommended dividend of Rs 1.20 per share.

Godrej Consumer Ltd Announces its Financial Results for the Quarter Ended March 31, 2018.

FINANCIAL OVERVIEW

4Q FY 2018 FINANCIAL PERFORMANCE SUMMARY:
·         4Q FY 2018 consolidated constant currency sales increased by 6%* year-on-year
-   India business sales growth of 7%* year-on-year, led by 6% volume growth
-   International business sales growth of 6% year-on-year, on a constant currency basis
·         4Q FY 2018 consolidated constant currency EBITDA increased by 14%
·         4Q FY 2018 consolidated net profit and EPS (without exceptional items) increased by 12%
·         The board has declared an interim dividend of 700% (INR 7.00 per share)
*Comparable growth assuming GST in the base quarter sales

CHAIRPERSON’S COMMENTS
Commenting on the financial performance of 4Q FY 2018,  Nisaba Godrej, Executive Chairperson, GCPL, said: “During fiscal year 2018, our focused strategy and balanced portfolio enabled us to deliver competitive, profitable growth, despite tough operating conditions in a few of our categories and geographies. Our constant currency sales increased by 9%* and EBITDA increased by 12%, led by robust gross margin expansion. We continue to make healthy investments in strengthening our brands and enhancing our capabilities for sustainable future growth.

In the fourth quarter of fiscal year 2018, we had a mixed performance with relatively softer sales growth, while sustaining robust EBITDA growth. Our India business delivered a competitive 7% comparable growth, driven by a volume growth of 6%. Our secondary sales growth was higher at 10%. The performance in our international portfolio was relatively muted due to the weakness in Indonesia and Africa. However, we expect to see a strong turnaround in growth rates in fiscal year 2019. We are planning for significant new launches and go-to-market initiatives across clusters. Overall, we are confident of delivering a stronger performance in fiscal year 2019.

We remain relentlessly focused on becoming more agile, increasing the pace of innovations, enhancing our go-to-market approach and investing in our key talent, to continue to outperform the market and deliver industry-leading returns.”

*Comparable growth assuming GST in the base quarter sales

BUSINESS REVIEW – INDIA

Performance Highlights
·         4Q FY 2018 India sales increased by 7%* to INR 1,329 crore
·         4Q FY 2018 Adjusted EBITDA increased by 22% to INR 383 crore
·         4Q FY 2018 net profit increased by 18% to INR 295 crore

Category Review

Household Insecticides
Household Insecticides had a subdued quarter with a sales decline of 5%* due to an adverse season in January-February 2018. However, our average growth rates are back to double digits for March-April 2018. Our recent launch in Personal Repellents is scaling up well, with double-digit market share in out of home segment. Towards the end of the quarter, we also launched a higher efficacy liquid vapouriser under the Goodknight brand.

Soaps
Soaps continued its strong, double-digit growth momentum and delivered a growth of 19%*. This was led by strong double-digit volume growth. This robust growth was driven by effective micro-marketing initiatives, variants-led strategy and strong on-ground execution. It was supported by healthy brand investments driving growth in Godrej No. 1 and Cinthol. We have also continued to gain market share during the quarter.

Hair Colours
Our Hair Colours business grew by 3%, following 33% growth in 3QFY18, driven by channel up-stocking post GST led MRP cuts. However, sales growth in 2HFY18 stood at 18%. Godrej Expert Rich Crème continues to improve penetration and gain market share.

Air Fresheners
Godrej aer continues to maintain its leadership position in the overall Air Care market and gain share, aided by innovations and strong execution.
Text Box: *Comparable growth assuming GST in the base quarter sales

BUSINESS REVIEW – INTERNATIONAL
Indonesia
Our Indonesia business sustained its robust margin expansion and regained all lost market share in Household Insecticides, with exit market share of over 50%. Constant currency sales declined by 6% during the quarter. Our growth was partially impacted by inventory reduction with key modern retail channel partners. The recently launched premium range of Hit Expert is receiving encouraging traction. Our adjusted EBITDA margin increased by 370 bps, despite higher A&P investments (up 160 bps year-on-year). This was led by rationalised trade promotion spends and Project PI (a cost savings initiative).

Africa, USA and Middle East
Our Africa, USA and Middle East business had a relatively weak quarter with constant currency sales growth of 7% led entirely by volume. Sales in the quarter was impacted by continuing sluggishness in Kenya; the business excluding Kenya grew in double-digits in constant currency terms. Our adjusted EBITDA margin declined by 400 bps year-on-year due to scale de-leverage and upfront investments to scale up the business.

Latin America
We saw a recovery in performance in our Latin America business with 28% constant currency sales growth.  Our adjusted EBITDA margin declined by 270 bps year-on-year due to an increase in marketing and sales promotion investments.

Europe
Our Europe business delivered a healthy sales growth of 11% in constant currency terms. The performance was led by strong growth in our own brands. Our adjusted EBITDA margin declined by 230 bps year-on-year due to a one-time reversal of A&P provisions in the base quarter.

Bank of India Offers Preferential Pricing to Consumers with Good CIBIL Score

Bank of India (BOI) is offering preferential pricing to consumers with a good CIBIL Score on a home loan of Rs 30 lakhs or more.

This initiative will see the bank offer a home loan at marginal cost of funds based lending rate (MCLR) for consumers with a CIBIL Score of 760 and above. MCLR is the minimum interest rate of a bank below which it cannot lend.

A consumer’s CIBIL Score is a 3-digit numeric summary of the credit information report (CIR) — summarizing the past credit behaviour and repayment history — and ranges from 300 to 900. The higher the Score, the better are the chances of loan approval. Most banks check a consumer’s CIBIL Score and Report before approving a loan.

Bank of India shared, “We are committed to providing superior, pro-active and innovative offerings to our customers, helping them access credit whenever required. Consumers with a good credit discipline should be rewarded, as it helps propagate the importance and need to maintain a good financial history. Our preferential pricing model aims to reward high-scoring home-loan aspirants with competitive ROI, thereby helping them making their dream home a reality.”

Bank of India’s new CIBIL Score-based ROI for home loan above Rs 30 Lakhs: CIBIL’s Head of Direct to Consumers Interactive, Hrushikesh Mehta commented, “Bank of India’s CIBIL Score based incentive helps further highlight the need to monitor and build a positive credit profile through good credit habits. This has always been our mantra and we are happy to be aligned with Bank of India on this. We are dedicated to helping consumers have a faster, easier and cheaper access to credit.”

ANB Capital Merges with Anuj Puri’s ANAROCK Property Consultants; Shobhit Agarwal to Head New Entity as MD & CEO - ANAROCK Capital

Anuj Puri, Chairman - ANAROCK Property Consultants and Shobhit Agarwal, MD & CEO - ANB Capital Advisors today announced the formal merger of ANB Capital with the ANAROCK Group to create ANAROCK Capital, which Shobhit Agarwal will head as MD & CEO. The ANAROCK Group’s residential services division has already defined itself as India's leading, fastest-growing and most disruptive consultancy in the industry. With the addition of the Capital Markets vertical, ANAROCK takes a major step forward towards its ambitious expansion plans.

"The Indian real estate market is in its next evolutionary stage, and perfectly primed for ANAROCK Capital," says Anuj Puri. "The firm will fill the massive real estate investment banking advisory gap that exists in a market completely redefined by RERA in terms of how the market operates and who will operate it going forward. Among several other functions, ANAROCK Capital will advise on big-ticket funding, acquisition and consolidation mandates. Shobhit's vast experience and deep-rooted industry relationships will come into play with immediate effect. I take particular pride in announcing the second merger of equals in my professional life - and more are to follow."

Shobhit Agarwal has been a prominent deal-maker in Indian real estate capital markets for over two decades and looks forward to taking the massive stakes involved to the next level. "Our capital markets team consists of well-honed industry experts who are adept at handling multimillion-dollar capital mandates" says Agarwal, who has already traded capital in excess of US$ 10 billion in his previous assignments. "Leveraging the ANAROCK Group's tremendous market penetration and superb operational infrastructure with 10 operational offices in India and 1 in Dubai, ANAROCK Capital will lead the real estate investment banking business from the front. There is over US$ 150 billion of capital to be traded in Indian real estate over the next 5 years - and with our collective expertise, existing exposure and resources, we are perfectly poised to capture a major share of it. "

Building on ANB Capital's existing strengths and expertise, ANAROCK Capital will provide services in real estate investment banking, financial management of big-ticket mergers, acquisitions and restructurings. The firm already provides capital advisory services to some of the country's leading corporations, institutions and state governments, based on a unique business model that eliminates the conflicts of interest inherent to large, multi-product financial institutions and multi-vertical international property consultants.

India's Startup Lenskart Invests in ThinOptics Inc.- A California based Start Up

Lenskart Solutions invests 0.5 Million USD in a California-based start-up ThinOptics Inc. that makes innovative reading glasses that stick on your nose; you can attach them to your phone, keychain, laptop, such that you never forget them.

ThinOptics has a patented designs that allows reading glasses to stay on your nose and you can tweak/mould them to get the best fit. These glasses have no temples, are super slim and look so cool that one can't not notice them on the face. 

Announcing the investment, Peyush Bansal, CEO, Lenskart said: “ThinOptics is a revolutionary product that solves the problem of people forgetting to carry their reading glasses everywhere and often losing them too. At Lenskart, our vision is to revolutionize eyewear and, hence, this investment fits that vision. We have been testing ThinOptics with Indian consumers for last few months and the response has been phenomenal. Almost all users come back and order a second pair! With this investment, we intend to work closely with ThinOptics’ California team for growing the India market as well as bringing more innovations in this area. I am excited about this investment.”

“We’ve been partners with Lenskart since 2015, and have been so pleased with the progress we’ve made together in the India market, we elected to deepen our relationship in 2018,” says David Westendorf, ThinOptics CEO. “With this Lenskart investment, we will continue to evolve our product portfolio to serve the sophisticated needs of India eyewear customers. We will be making several new product announcements in the coming months that deliver on our brand promise to always have our glasses within reach, on the items you never leave home without: your phone, your wallet and keys.”

This is Lenskart's third investment in less than a year. The company, in September 2017, invested in Ditto, which is an augmented reality technology for trying frames online. Just recently, Lenskart also invested in 6over6, an Israel based start-up, working on enabling eye exams through the Android phone. The company is clearly going after innovation centered around eyewear and has made a dominant mark in the Indian eyewear industry.

Lenskart is now the largest optical retailer in the country with 5 million plus App downloads, 410 stores, 200 home opticians. Company claims to ship 300,000 eyewear per month which is the largest in the country now.

ThinOptics products are now available on Lenskart website and App.