Category Archives: Business

Digital ad spending in India to cross Rs 13,000 crore mark by 2018: ASSOCHAM

MANGALURU: With the growing demand for smartphones and falling data prices are likely to increase digital advertising spend in India from the current level of Rs 9,800 crore to Rs 13,000 crore by December 2018 growing at a compound annual growth rate (CAGR) of 35%, according to ASSOCHAM.

Due to easy and widespread availability of 3G/4G services and also the on-going surge in internet penetration in the country will lead to an exponential increase in digital advertising in India, according to the Associated Chamber of Commerce and Industry of India (ASSOCHAM), a recent paper.

The digital advertising spend was estimated to be around Rs 7,500 crore at the end of 2016. Around 50% of their overall advertising spend was on digital followed by e-commerce, telecom, technology and banking, financial services and insurance companies.

The paper jointly brought out by ASSOCHAM-KPMG has stated that mobile transactions accounted for 42% of total e-commerce sales in 2015 and that developing a mobile strategy has been an important agenda for many of the leading e-commerce players in the country over the last two to three years.

India manufactured 11 crore mobile phones worth Rs 54,000 crore in FY16, showing a year-on-year growth of 83% and 186%, in volume and value terms, respectively. With the ability to provide feature rich yet affordable handsets, domestic manufacturers’ share of the handset market is slated to grow further.

According to said paper, the market for mobile handsets in India is growing at a fast rate. It has grown at a CAGR of nearly 15% from 2011 to 2016. It also contributed nearly 7.6% to the global smartphone market.

The digital advertisement industry is growing rapidly as there is a growth in digital communication devices around the world. The increase in smartphones, tablets is enabling advertisers to reach a wider audience. The digital advertisements are flexible and can be adapted for any kind of device like television, laptop, tablet, or smartphone. The two-way interactive capability and the ability to customize the ad for target audience also make digital advertisements more effective, noted the paper.

More than 235 million people in India access internet through mobile devices. This is the primary reason for e-tailers to focus their efforts on mobile app penetration across the country. The mobile applications are helping to reach more customers located even in remote and rural areas.

E-commerce companies have been able to bridge the service gap considerably by sending service updates and other communication via their mobile app, e-mail, and SMS. Customers can get alerts, view product catalogues, purchase and pay with a simple mobile application offering a compelling user experience. Also, from mobile usage, the e-tailers get valuable customer information which can be used for analytics to improve their services and sales.

ASSOCHAM also added “India’s mobile handset industry is a key enabler for the government’s ‘Digital India’ initiative, launched in July 2015 to work together on a common agenda to transform the country into a digitally powered society and economy. Several international device vendors have set up manufacturing facilities in India, supporting the government’s ‘Make in India’ initiative aimed at boosting local manufacturing.”

Govt raises Rs 14,500 crore from Bharat-22 ETF

NEW DELHI: The government has raised Rs 14,500 crore through the Bharat-22 Exchange Traded Fund (ETF), comprising 22 companies, a top official said today.

“We have decided to retain Rs 14,500 crore of the total subscription that has come in for Bharat-22 ETF,” Department of Investment and Public Asset Management (DIPAM) Secretary Neeraj Gupta said.

The ETF saw bids of nearly Rs 32,000 crore coming in, with FIIs bidding for one-third of the money.

The portion reserved for retail investors was subscribed 1.45 times; retirement funds — 1.50 times and NIIs and QIBs — 7 times.

With this, the government has raised Rs 52,500 crore through disinvestment in the current fiscal, including listing of insurance PSUs.

Last week the portion reserved for anchor investors was subscribed six times amounting to Rs 12,000 crore.

ICICI Prudential Mutual Fund managed Bharat-22 ETF’s new fund offer (NFO) had an initial issue size of over Rs 8,000 crore. As much as 25 per cent of total issue size, or Rs 2,000 crore, was reserved for anchor investors who put in bids worth about Rs 12,000 crore.

LIC, Bank of India, SBI Pension Fund, EPFO and HDFC Ergo Insurance are among those who have put in bids.

“During the three days reserved for non-anchor investors, we witnessed an overwhelming response from all investors, particularly retail segment. In due course, the ETF will be listed,” ICICI Prudential AMC MD and CEO Nimesh Shah said.

The issue opened for subscription for retail investors from November 15-17.

This Index is a unique blend of shares of key Central Public Sector Enterprises (CPSEs), Public Sector Banks (PSBs) as also government shares in blue chip private companies like Larsen & Toubro (L&T), Axis Bank and ITC.

The shares of the government companies represent six core sectors of the economy – Finance, Industry, Energy, Utilities, Fast Moving Consumer Goods (FMCG) and Basic Materials, making the Index broad-based and diversified.

The government has set an ambitious target of raising Rs 72,500 crore for disinvestment in the current fiscal. Of this, Rs 46,500 crore is to be raised through minority stake sale in PSU and Rs 15,000 crore from strategic sale. Another Rs 11,000 crore is to come from listing of insurance companies.

The state-owned companies or PSUs that are part of the new Bharat ETF 22 include ONGC, IOC, SBI, BPCL, Coal India and Nalco.

The other CPSEs on the list are Bharat Electronics, Engineers India, NBCC, NTPC, NHPC, SJVNL, GAIL, PGCIL and NLC India. Only three public sector banks — SBI, Indian Bank and Bank of Baroda — figure in the Bharat-22 index.

Markets end flat, Sensex up 17 points

NEW DELHI: Markets ended flat on Monday after a muted start due to weakness in IT and metal stocks. During the day, the banking and pharma stocks were seen under pressure.

The 30-share BSE Sensex rose 17.10 points, or 0.05 per cent, to end at 33,359.90. Among major Sensex losers, Infosys, Cipla, SBI, ICICI Bank and Dr Reddy’s fell by up to 2.17 per cent, pulling the index down.

The 50-share Nifty also ended 15.15 points or 0.15 per cent higher at 10,298.75.

Markets end flat, Sensex up 17 points

NEW DELHI: Markets ended flat on Monday after a muted start due to weakness in IT and metal stocks. During the day, the banking and pharma stocks were seen under pressure.

The 30-share BSE Sensex rose 17.10 points, or 0.05 per cent, to end at 33,359.90. Among major Sensex losers, Infosys, Cipla, SBI, ICICI Bank and Dr Reddy’s fell by up to 2.17 per cent, pulling the index down.

The 50-share Nifty also ended 15.15 points or 0.15 per cent higher at 10,298.75.

Financial advice: Parents, leave young earners alone please

Young earners are easy targets for unsolicited financial advice. Earnest and anxious parents persuade the young, worried that they do not know to handle money. But the practical problems of the young earners are something else altogether. They cannot figure how to not run out of money too soon. The earning seems too small for the long-list of needs and wants. There seems to be a lot of money and then there is none. They are not sure why ‘settling down’ should be a goal. Being financially independent is a new thing they want to deal with it mostly by themselves. Here is my list for parents primarily, so they can get out of the way.

First, allow time and experience for the young earners to use their money. There is no universal set of rules and habits that work for everyone. How someone will deal with money is a very personal choice and people need the time to develop the self-awareness about how and why they make the decisions they do with money. Allow the young to act and deal with the consequences of their action, so they learn from the experiences of spending money. Those lessons last longer than earnest parental advice.

Second, the first five years of one’s career is most demanding. Many young people are not even prepared for what their work lives would be like, and whether they are willing to do it for the long-term. It is only when they begin to work that they understand what it takes, and are then able to evaluate whether they are competent for the chosen job, if they enjoy it, and whether there is something else that they can do. The first 5 to 10 years of work life is the foundation to a steady and growing career. Being burdened with a EMI of a house bought soon after the first job, simply ties them down.

Third, flexibility in terms of the job and career is precious to a youngster. Being able to move from one area of work to another, or pick up an assignment in another location, or choose a second career, or take a break to study further, are all choices that young people make to build themselves as professionals. Persuading the young to get married, buy a house, have a child, or stay with the parents are all traditional and emotional traps. The bonds with family are strong enough for them to stay connected and to return after finding their feet. Building value into the human asset that is themselves is the primary goal. All other assets can come later.

Fourth, the biggest personal finance challenge for the young earner is managing cash flows. Unexpected need for money is a persistent problem, though it comes interspersed with periods of ample liquidity. A simple bank account that can be swiped into a fixed deposit, and swiped back in when needed, serves their needs quite well. If they can build on that relationship with the bank to get a pre-sanctioned personal loan or overdraft limit, that helps too. A credit card that enables a large spend when needed is welcome. Their financial life is about managing liquidity most of the time. Help them understand the costs of a credit card and personal loans; do not lock their money into illiquid assets.

Fifth, saving is a good habit. If a young earner can set money aside from the start, and build a corpus, that is excellent. But that kind of long-term orientation towards money is a cultivated habit. The time someone takes to get there can be different. Give your children the time to see the merits and make the sacrifices needed to develop a steady saving habit. It is cruel to make a young earner save all earnings for an unknown future event. If there is a shared future goal, working towards it is worthwhile. Don’t insist on frugality because that is your own righteous view.

It is fine for young earners to rent their accommodation, eat out instead of cook, travel with friends, and live a lifestyle that fits within their income. Saving habits can come in as they manage their cash flows and make decisions. It is important for income to stabilise, grow and become less risky with each year. Personal financial decisions must support this primary goal and not take away from it in the form of housing EMIs, credit card dues, overdue loans or imposed lifestyle expenses that come with including a spouse in the scheme of things. Let them be, please.

The author is the Chairperson of The Centre for Investment Education and Learning

These are top 11 holders of US govt bonds

WASHINGTON: India’s holdings of US government securities touched $145.1 billion at the end of September, continuing to increase its exposure, official data showed. Remaining the 11th largest holder of the US Treasury securities, India increased its holdings by little over $6 billion in September compared to August when the same stood at $139 billion.

The US government data showed that India’s holdings rose to $145.1 billion in September — also the highest so far this year. According to data from the Treasury department, the exposure of India to these securities has been on the rise since February when it had touched $112.3 billion. The country’s holdings have jumped by $31.4 billion in eight months starting January when the exposure was at $113.7 billion.

India holds $145 billion of US govt bonds

WASHINGTON: India’s holdings of US government securities touched $145.1 billion at the end of September, continuing to increase its exposure, official data showed. Remaining the 11th largest holder of the US Treasury securities, India increased its holdings by little over $6 billion in September compared to August when the same stood at $139 billion.

The US government data showed that India’s holdings rose to $145.1 billion in September — also the highest so far this year. According to data from the Treasury department, the exposure of India to these securities has been on the rise since February when it had touched $112.3 billion. The country’s holdings have jumped by $31.4 billion in eight months starting January when the exposure was at $113.7 billion.

Alibaba takes $2.9 billion stake in food retailer

BEIJING: Alibaba said on Monday it would take a major stake in one of China’s top food sellers for $2.9 billion as the e-commerce giant expands further into the retail world.

China’s largest e-commerce platform has invested heavily in recent years to connect its online and offline portfolio of businesses, taking stakes in several Chinese grocers, shopping malls and department stores.

Alibaba will buy a 36 percent stake in Sun Art Retail Group from Taiwanese conglomerate Ruentex Group, leaving Alibaba and French firm Auchan Retail with roughly equal stakes in Sun Art’s 446 hypermarkets that sell everything from groceries to clothes.

Sun Art also operates smaller superstores and is building a line of unmanned stores.

Hangzhou-based Alibaba has bet its future on uniting online and offline selling, executing the strategy well before US-based Amazon made its first major purchase of bricks and mortar grocer Whole Foods earlier this year.

“Alibaba is excited to join with our new partners to redefine traditional retail through digital transformation,” chief executive Daniel Zhang said in a statement.

Sun Art is one of Auchan’s major bets on the Chinese market and the chain of stores has been a boon for its business. The Alibaba investment will integrate Sun Art’s bricks and mortar stores with the online selling giant’s platform, the companies said in a press release.

“Bringing together the leaders of in-store retail and of online retail will allow us to serve hundreds of millions of Chinese consumers a fully integrated, world-class shopping experience,” said Wilhelm Hubner, chief executive of Auchan Retail, which will slightly raise its stake in Sun Art as part of the deal.

Nilekanis join Bill Gates at philanthropy high table

By Anand Mahadevan and Archana Rai

BENGALURU: In a reflection of the growing enlightenment about philanthropy among India’s rising tribe of billionaires, Infosys chairman Nandan Nilekani and wife Rohini have signed the Giving Pledge pioneered by Bill Gates and Warren Buffett.

Signatories to the initiative commit to give away at least half of their wealth either in their lifetime or through their will.

The only other Indians to have signed the Giving Pledge are Azim Premji of Wipro, Kiran Mazumdar-Shaw of Biocon and PNC Menon of Sobha Developers.

Creating Sustainable Change
“Wealth comes with a huge responsibility and is best deployed for the larger public interest,” Nandan and Rohini wrote in their pledge.

“We have been doing philanthropy for almost 20 years. But signing the Giving Pledge helps us join many people who are coming together and thinking about how to solve the world’s large problems,” they told ET in an exclusive interaction along with Bill Gates.

The Nilekani fortune is estimated to be about $1.7 billion, much of it coming from the family’s 2% shareholding in Infosys. Nandan Nilekani co-founded Infosys along with NR Narayana Murthy and others.

“Nandan and Rohini are not only a great example of generosity, they are also putting their time and energy into philanthropy. A lot of stuff they are doing is very catalytic,” Bill Gates told ET. “Philanthropy is tough. It forces you to think about your death. It requires a family to get to a certain point where they feel that giving makes sense for them. 171 people have signed the Giving Pledge. This is way beyond what we thought we would ever achieve,” Gates added.

Gates and Buffett announced and signed the pledge with about 40 global billionaires in 2010. Since then, they have also been evangelising philanthropy, encouraging many more to give away a majority of their fortune to fight poverty and promote equitable growth.

The Nilekanis believe that while India’s super-wealthy are experiencing a greater desire to donate their wealth to charitable causes, the ability to create sustainable change with the money is given away is still lagging behind. They hope to direct much of their giving to nurture ‘societal platforms’ or tech-enabled collaborative initiatives involving the government, entrepreneurs, non-profits and individual citizens.

Signatories to the Giving Pledge are free to direct their philanthropy to causes they feel most drawn to. This is not a legally binding agreement, but just a voluntary and moral commitment.

Alia Bhatt buys stake in startup StyleCracker

MUMBAI: Bollywood actress Alia Bhatt has picked up a small minority stake in fashion-tech startup StyleCracker for an undisclosed amount, becoming the latest celebrity to turn investor.

The four-year-old company offers customers personalised fashion boxes curated by celebrity stylists. The 24-year old actress, along with a consortium of investors, have invested in the company as part of pre-Series A funding.

“This has come from heart and not mind,” Bhatt told ET. “I am not actively looking for investments, but Archana has been my stylist for many years and when I came to know about StyleCracker, it seemed like a very logical move.

Post this round, company founders Dhimaan Shah, a former investment banker, and Archana Walavalkar, former fashion editor, Vogue, will jointly own 65% stake in StyleCracker. Bhatt and a clutch of other investors, including a few investment bankers, a former private equity company trading head and a fund manager, will hold the remaining stake.

Shah, StyleCracker’s MD, said the company is a first of its kind tech-fashion start-up. “We are like style advisors for our customers. We are already seeing 60-65% repeat business, and this fund-raising will help us to scale up,” he said.

Currently the company caters only to female customers. “But very soon we will also launch similar products for male consumers. Everyone needs a stylist,” Shah said.

Walavalkar, creative director, said StyleCracker is a platform that “understands the customer, creates their unique profile and then curates a wardrobe that suits any mood or occasion”.

StyleCracker launched customised boxes four months back. Priced at Rs 2,999, Rs 4,999 and Rs 6,999, these boxes contain an apparel, accessories, cosmetics and even footwear.

The company shipped over 50,000 boxes across 35 cities in the last four months, says Shah. “We were surprised to see that there is more demand from tier II and III cities. From small towns, we get more orders for Rs 4,999 and Rs 6,999 boxes.”

He said the company can serve 1 million customers a month.


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