70% startups say business hit by COVID-19, 12% have shut down: FICCI

Agencies
July 6, 2020

The Covid-19 pandemic has made an unprecedented impact on the Indian businesses, particularly small and medium enterprises (SMEs) and startups. According to a joint survey by FICCI and Indian Angel Network (IAN), the pandemic has hit the businesses of around 70% startups.

With uncertainty in the business environment and an unexpected shift in priorities of the government as well as corporates, many startups are struggling to survive, it says.

In a nationwide survey on the 'Impact of Covid-19 on Indian Startups' involving 250 startups, 70% participants said their businesses had been impacted by Covid-19 and around 12% had shut operations.

The survey shows only 22% startups have cash reserves to meet the fixed cost expenses over the next 3-6 months, and 68% are reducing operational and administrative expenses.

Around 30% of the companies said they would retrench employees if the lockdown was extended too long. The 43% startups have already started 20-40% salary cuts over April-June.

Over 33% startups said investors had put the investment decision on hold and 10% said the deals had been scrapped. Only 8% startups had received funds as per the deals signed before Covid-19 outbreak, the survey revealed.

The reduced funding has forced startups to put a hold on business development and manufacturing activities, which has resulted in loss of projected orders.

The survey highlights the need of an urgent relief package for startups, including possible purchase orders from the government, tax relief and swifter tax refunds, and immediate fiscal support measures, including grants, soft loans and payroll grants.

Besides 250 startups, 61 incubators and investors also participated in the survey.

While 96% of investors accepted that their investments in startups had been impacted by Covid-19, 92% said their investments in startups would continue to be low over the next six months.

Around 59% investors said they would prefer to work with the existing portfolio firms in the coming months. Only 41% said they would consider new deals.

"A comparison of priority investment sectors before and during Covid-19 shows 35% investors are now looking at investments in healthcare startups, followed by EdTech, AI/Deep Tech, FinTech and Agri," said the survey.

Around 44% incubators surveyed said their day-to-day operations had been considerably hit by Covid-19. Most incubators are now supporting their portfolio firms by providing them virtual platforms to interact with mentors, investors and industries.

Dilip Chenoy, FICCI Secretary General, said, "The startup sector is stressed for survival at the moment. The investment sentiment is also subdued and is expected to remain so in the coming months. Lack of working capital and cash flows may lead to major layoffs over the next 3-6 months."

Indian startups needed an enabling ecosystem and flow of funds to continue operations, the survey said.

Padmaja Ruparel, President, Indian Angel Network & Co-Chair of FICCI Startup Committee, said, "In these uncertain times, as investors, we must play an important role to provide the Indian startups funding, mentoring and hand-holding support to stay afloat and come out at the other end of this crisis."

To that end, IAN recently announced a debt fund to help IAN portfolio companies raise working capital and ensure business continuity by partnering with debt providers.

This must be replicated on a wider scale, so a larger number of startups are provided the capital support to make it during these tough times, Ruparel said.

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Agencies
February 26,2020

New Delhi, Feb 26: With the government pushing for the disinvestment of Air India, industrial conglomerate Adani Group may emerge as one of the bidders for the debt-laden national carrier, sources said.

According to highly placed sources, the Group has held internal rounds of deliberations on whether or not to submit an Expression of Interest (EoI) and the discussions are still in the preliminary stage.

If the company actually submits an EoI, it would be a major move towards further diversification of the company which has business interests across sectors right from edible oil, food to mining and minerals. 

It also entered into airport operations and maintenance business and won bids for privatisation of six airports, Ahmedabad, Lucknow, Jaipur, Guwahati, Thiruvananthapuram and Mangaluru in 2019. 

On being contacted by IANS, the company did not comment on the matter.

Air India is one of the most important divestment proposals for the current fiscal to reach the huge Rs 2.1 lakh crore target.

The government in January restarted the divestment process of the airline and invited bids for selling 100 per cent of its equity in the state-owned airline, including Air India's 100 per cent shareholding in AI Express Ltd. and 50 per cent in Air India SATS Airport Services Private Ltd.

After its unsuccessful bid to sell Air India in 2018, the government this time has decided to offload its entire stake. In 2018, it had offered to sell its 76 per cent stake in the airline.

Of the total debt of Rs 60,074 crore as of March 31, 2019, the buyer would be required to absorb Rs 23,286 crore.

Air India, along with its subsidiary Air India Express, has a total operational fleet of 146 aeroplanes.

Further, the disinvestment department has extended the last date for submission of written queries on the Performance Information Memorandum and Share Purchase Agreement to March 6.

The last date for submission of written queries on PIM and SPA was originally set for February 11, following which the Department of Investment and Public Asset Management (DIPAM) on February 21 issued 20 clarifications on the queries raised and expected.

Any delay in the tentatively rolled out timeline would also delay DIPAM's plan to identify the pre-qualified bidders by March 31 and the financial bids invitation as well. It is expected to take more than two months after the selection of the pre-qualified bidders to complete Air India's sale.

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Agencies
May 10,2020

In the wake of the gas leak at a factory in Visakhapatnam, the National Disaster Management Authority (NDMA) has issued detailed guidelines for restarting industries after the lockdown and the precautions to be taken for the safety of the plants as well as the workers.

In a communication to all states and union territories, the NDMA said due to several weeks of lockdown and the closure of industrial units, it is possible that some of the operators might not have followed the established standard operating procedures.

As a result, some of the manufacturing facilities, pipelines, valves may have residual chemicals, which may pose risk. The same is true for the storage facilities with hazardous chemicals and flammable materials, it said.

The NDMA guidelines said while restarting a unit, the first week should be considered as the trial or test run period after ensuring all safety protocols.

Companies should not try to achieve high production targets. There should be 24-hour sanitisation of the factory premises, it said.

The factories need to maintain a sanitisation routine every two-three hours especially in the common areas that include lunch rooms and common tables which will have to be wiped clean with disinfectants after every single use, it added.

For accommodation, the NDMA said, sanitisation needs to be performed regularly to ensure worker safety and reduce the spread of contamination.

To minimise the risk, it is important that employees who work on specific equipment are sensitised and made aware of the need to identify abnormalities like strange sounds or smell, exposed wires, vibrations, leaks, smoke, abnormal wobbling, irregular grinding or other potentially hazardous signs which indicate the need for immediate maintenance or if required shutdown, it said.

At least 11 people lost their lives and about 1,000 others were exposed to a gas leak at a factory in Andhra Pradesh''s Visakhapatnam on May 7.

The incident took place after it restarted operations when the government allowed industrial activities in certain sectors following several weeks of lockdown.

The lockdown was first announced by Prime Minister Narendra Modi on March 24 for 21 days in a bid to combat the coronavirus threat. The lockdown was then extended till May 3 and again till May 17.

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Agencies
January 25,2020

New Delhi, Jan 25: The Patiala House court on Saturday started hearing a plea filed by the Nirbhaya convicts that alleged that the Tihar Jail administration have "not presented the papers on time".

The Public Prosecutor informed the court that Tihar Jail authorities have already supplied the relevant documents. He further informed that these are mere delaying tactics adopted by the convicts.

Advocate A.P. Singh, lawyer for three of the four death row convicts in the Nirbhaya gang-rape case had moved an application before the court seeking directions to the Tihar Jail authorities to supply him the relevant documents in order to exercise the remaining legal remedies available with the death row convicts -- Vinay Pawan and Akshay.

The Public Prosecutor also told the court that he spoke to the jail authorities over the phone and a report in this regard will be filed shortly as the jail officials were on their way to the court.

The judge demanded from the convicts lawyer to show what he has filed.

The convicts lawyer, A.P. Singh, said that he received some documents, but has still not been supplied with the personal diary of one of the convict -- Vinay Kumar Sharma and also the medical documents.

Judge then asked the lawyer to wait for until the report arrives form the Tihar Jail.

On this, the convicts lawyer said he was not questioning the intention of the jail. "I know the jail has been changed. It isn't there fault, too," he said.

The Public Prosecutor refuted the allegation saying that the defence counsel was trying to defeat the speed of law.

"We have supplied all the documents to the counsel. We have supplied all the documents except the painting and some other documents. We have nothing apart from that," public prosecutor said.

Singh, in his plea filed before the Patiala House Court sought urgent orders of the court in order to file a mercy petition of Vinay Sharma and in relation to requests for documents for convicts Vinay Sharma, Pawan Kumar Gupta and Akshay Kumar Singh.

He further said that the convicts undertook several steps to obtain relevant information necessary for filing the mercy petitions. In regular interval, the convicts requested the concerned authority to supply documents pertaining to their medical records from 2012 to 2015 and 2019-2020, records of cellular confinement, records of the amount earned in prison through labour, records of educational and reformative activities like Tihar Olympics and Painting, etc.

The Supreme court had recently dismissed the curative petition for the other two convicts -- Vinay Kumar Sharma (26) and Mukesh Singh (32).

The court had recently issued death warrant against the convicts and fixed 6 a.m. on February 1 as the date and time of execution of the death penalty.

The 23-year-old victim in the case was brutally gang raped and tortured on December 16, 2012, which later led to her death. All the six accused were arrested and charged with sexual assault and murder. One of the accused was a minor and appeared before a juvenile justice court, while another accused committed suicide in Tihar Jail.

Four of the convicts were sentenced to death by a trial court in September 2013, and the verdict was confirmed by the Delhi High Court in March 2014 and subsequently upheld by the Supreme Court in May 2017, which also dismissed their review petitions.

A Juvenile involved in the crime was convicted by a juvenile justice board and released from a reformation home after serving a three-year term.

Hearing in a different case, Chief Justice of India S.A. Bobde on Thursday said a condemned person cannot fight the death penalty endlessly and it was important for the capital punishment to reach its finality.

The death penalty, he noted, cannot be questioned at every turn by the convict.

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