Snapdeal ends merger talks with Flipkart; to go solo

Agencies
July 31, 2017

New Delhi, Jul 31: Snapdeal today called off the USD 950 million-takeover (over Rs 6,000 crore) by Flipkart, apparently over differences in valuation and terms of what could possibly have been the largest deal in the Indian e-commerce space.

Discussions to acquire the beleagured Snapdeal by Flipkart were initiated in March but contours of the deal could not reach a finality even after several rounds.

"Snapdeal has been exploring strategic options over the last several months. The company has now decided to pursue an independent path and is terminating all strategic discussions as a result," a Snapdeal spokesperson said in a statement, without naming Flipkart.

The spokesperson added that the company will now pursue "Snapdeal 2.0" which is expected to help Snapdeal be "financially self-sustainable".

Japanese conglomerate SoftBank, which holds close to 35 per cent stake in Snapdeal and one that was driving the discussions, said it supports entrepreneurs and their vision.

"...we respect the decision to pursue an independent strategy. We look forward to the results of the Snapdeal 2.0 strategy, and to remaining invested in the vibrant Indian e- commerce space," a SoftBank spokesperson said.

According to company sources, the talks ended on account of the complexity of the deal that came with multiple conditions, right from indemnity to a non-compete clause.

These did not find favour with the founders of the Gurugram-based online marketplace, they added. The sources did not wish to be named as the discussions were private.

The deal was also contingent upon a nod from Snapdeal's high-profile minority investors, including Ratan Tata and Azim Premji's investment arm, PremjiInvest.

It wasn't immediately clear if any of the minority shareholders had objected to the deal. Once a leading player in the Indian e-commerce space, Snapdeal has seen its fortunes falling amid strong competition from rivals, Amazon and Flipkart.

Its valuation plunged from a peak of about USD 6.5 billion in February 2016 to about USD 1 billion during the latest round of discussions. India's nascent e-commerce sector is witnessing an intense battle for leadership between US-based Amazon and homegrown firm, Flipkart as more Indians turn to online shopping.

The players have been pumping in millions of dollars in building infrastructure, getting sellers online as well as promotions to bring more shoppers onboard.

The decision to continue independently also comes within days of Snapdeal agreeing to sell its digital payment platform, FreeCharge, to Axis Bank for Rs 385 crore.

One of the sources said Snapdeal is now pivoting into a 'Taobao'-like open marketplace setup and with money coming in from the sale of non-core assets like Freecharge and Vulcan (when it gets completed), the company will have a run time of at a few years. Snapdeal has about 1,200 employees.

In an e-mail to employees last week, Bahl had indicated that the company may decide to continue independently. Bahl had said the Freecharge deal would give Snapdeal the "necessary boost in resources" to continue its e-commerce journey.

The discussions with Flipkart stretched over five months for a number of reasons. SoftBank worked overtime to get early investors, Kalaari and Nexus Venture Partners -- who also have Board representation -- to agree to the deal.

After their approval, Snapdeal Board turned down Flipkart's USD 800-850 million (about Rs 5,500 crore) offer, saying the amount undervalued the company.

While Flipkart revised the offer to USD 900-950 million, it came with a number of riders that did not find favour with the company.

There have been reports suggesting that SoftBank was looking at picking up stake in Flipkart through the Snapdeal transaction.

With the deal now off, reports say SoftBank may look at investing in Flipkart separately, though it could not be independently verified.

Greyhound Research chief analyst and CEO Sanchit Vir Gogia said Snapdeal 2.0 will need the company to have a different approach to survive and thrive.

"They will have to take a specialised approach to ensure they can continue. The market is now clearly open to a third player after Amazon and Flipkart, possibly to Paytm," he said.

Gogia also noted that the development should also be a reminder to startups that "they should not take consumers and investors for granted". "Valuation alone doesn't help keep a business alive," he said.

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Agencies
June 17,2020

Mumbai, Jun 17: A lawyer on Wednesday moved a criminal complaint against 8 persons, including Bollywood superstar Salman Khan and producer-director Karan Johar, in a local court regarding the death of Bollywood actor Sushant Singh Rajput.

The court had fixed July 3 as the next date of hearing.

In his complaint filed in the court of Chief Judicial Magistrate, advocate Sudhir Kumar Ojha alleged that these eight persons forced Sushant to commit suicide under a conspiracy which, he pleaded, amounted to murder.

Others named in the complaint are Aditya Chopra, Sajid Nadiadwala, Sanjay Leela Bhansali, Bhushan Kumar, Ekta Kapoor, and director Dinesh.

The complainant claimed that these persons did not let Sushant's movies get released under a conspiracy and the late actor was not even invited to film functions because of these people.

Ojha said that Sushant Singh Rajput's death had not only hurt the people of Bihar but the entire country.

He said the complaint had been filed under Sections 306, 109, 504 and 506 and Bollywood actor Kangana Ranawat had been listed as a witness in the case.

Sushant Singh Rajput had allegedly committed suicide at his Bandra flat in Mumbai on Sunday.

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Agencies
July 24,2020

New Delhi, Jul 24: Telecom companies lost 82.3 lakh subscribers during the COVID-19 lockdown period of April, data released by the Telecom Regulatory Authority of India (TRAI) on Friday showed.

As per the reports received from 342 operators in April, TRAI said the number of broadband subscribers decreased from 68.7 crore at the end of March to 67.6 crore at the end of April with a monthly decline rate of 1.64 per cent.

Top five service providers constituted 98.98 per cent market share of total broadband subscribers with Reliance Jio Infocomm (38.9 crore), Bharti Airtel (14.4 crore), Vodafone Idea (11.1 crore), BSNL (2.1 crore) and Atria Convergence (16 lakh).

The number of overall telephone subscribers decreased from 117.7 crore at the end of March to 116.9 crore at the end of April, showing a monthly decline rate of 0.72 per cent.

The TRAI said total wireless subscribers (2G, 3G and 4G) decreased from 115.7 crore at the end of March to 115 crore at the end of April, thereby registering a monthly decline rate of 0.71 per cent.

Wireless subscription in urban areas decreased from 63.8 crore to 62.9 crore but increased in rural areas from 51.9 crore to 52 crore. Monthly growth rates of urban and rural wireless subscription were minus 1.42 per cent and 0.16 per cent respectively.

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News Network
February 1,2020

Washington, Feb 1: The Indian economy experienced some abrupt slowdown in 2019 due to turbulence in non-banking financial institutions and major reform measures such as GST and demonetisation, but it is not in a recession, IMF Managing Director Kristalina Georgieva has said.

"The Indian economy indeed has experienced an abrupt slowdown in 2019. We had to revise our growth projections, downwards to four percent for last year. We are expecting 5.8 per cent (growth rate) in 2020 and then an upward trajectory to 6.5 percent in 2021," Georgieva told a group of foreign journalists here on Friday.

"It appears that the main reason for this slowdown was the non-banking financial institutions experiencing a turbulence," she said on the eve of Union Finance Minister Nirmala Sitharaman presenting the annual budget in Parliament on Saturday.

She said India had undertaken some important reforms that over the longer term would be beneficial for the country, but they do have some short-term impact.

"For example, coming with the unified tax system, and the demonetisation that took place. These are steps that over time are beneficial, but of course they might, might be somewhat disruptive over short term," Georgieva said in response to a question.

The International Monetary Fund (IMF) Managing Director said that there is not a lot of fiscal space in India. “But we also recognise that the policies of the government on that side, on the fiscal side have been prudent. We will see how the reading of the budget, the submission of the budget goes, tomorrow,” she said.

In the medium-term, she said, the IMF remains optimistic about India. “This is why we see that upswing potential for the growth in the country,” she said.

Georgieva said that the current economic slowdown cannot be described as a recession. "No.... You're far from that. But it is a significant slowdown, not the recession," she said.

The IMF managing Director noted that the consumption in India also slowed down and that contributed to the overall slowdown in the economy. The IMF would be keen to see what India does to get relatively sound macroeconomic fundamentals to pay off in terms of better growth trajectory, she said ahead of the budget.

One thing that is important for India is that budgetary revenue have been below target. "The country knows that. The finance minister knows it. They need to increase budgetary revenue collection so they can improve their fiscal position. I said it's tight on the spending side, but I also want to stress that there is room to improve collection on the revenue side," she said.

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