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Saturday, March 23, 2019
L&T set to seal Mindtree deal with Café Coffee Day founder VG Siddhartha

L&T set to seal Mindtree deal with Café Coffee Day founder VG Siddhartha Mindtree chairman and cofounder Krishnakumar Natarajan meanwhile warned against a hostile takeover bid in a letter to the L&T board on Saturday. Larsen & Toubro (L&T) is planning to sign a deal with Café Coffee Day founder VG Siddhartha to buy his 21% stake in MindtreeNSE 1.05 % and launch an open offer for an additional 31% stake in the IT company, probably as early as Monday evening, said several people aware of the developments.

Mindtree chairman and cofounder Krishnakumar Natarajan meanwhile warned against a hostile takeover bid in a letter to the L&T board on Saturday, these people said.

The engineering conglomerate is keen to act before Mindtree’s board meeting on Wednesday to consider a buyback proposal that’s seen as an attempt to thwart the L&T bid. Siddhartha is also expected to be in Mumbai on Monday.

L&T is likely to announce it has acquired his 20.4% stake and launch its open offer. The L&T offer price for another 31% stake may be around Rs 980 apiece, a 4% premium to Friday’s closing price of Rs 946. Citi and Axis Capital are said to be working on the open offer. KPMG Corporate Finance is the lead adviser to L&T.

An agreement with Siddhartha, the largest shareholder, is likely to scupper the buyback plan. Once he sells his stake, any change in capital structure will need a shareholder vote. In the normal course, a company can go for a buyback of up to 10% of its free reserves without shareholder approval.

Mindtree’s free reserves are estimated at Rs 2,800 crore. L&T is moving quickly as Standard Chartered Bank has agreed to lend Siddhartha Rs 3,000 crore to release his pledged Mindtree shares held with over a dozen banks and consolidate all of them under one entity.

Siddhartha had in several tranches pledged almost the entire 21% holding held by him and two affiliate firms to several domestic and foreign lenders including Yes Bank, Kotak Mahindra, RBL, Edelweiss, Standard Chartered and Axis to borrow funds for various group activities.

“This will help him and L&T both as the share transfer will be easier now. Instead of so many lenders, they will now have to get a NoC (no objection certificate) only from one,” said a lender with direct knowledge of the development. “A distributed pledge adds to the complexity as the repayment schedule is different for all.”

Standard Chartered Bank and L&T declined to comment. Siddhartha didn’t respond to queries. Mindtree cofounder and board member Subroto Bagchi said on Sunday that he’d quit as chairman of the Odisha Skill Development Agency to help counter the takeover threat.

“An imminent threat of hostile takeover of Mindtree has made me resign from the Government to be able to go, save the company,” Bagchi tweeted. “I must protect the Tree from people who have arrived with bulldozers and saw chains to cut it down so that in its place, they can build a shopping mall.”

The weekend saw frantic activity on both sides, sparked by the buyback plan announcement on Friday. The founding promoters led by Natarajan, Subroto Bagchi, NS Parthasarathy and Rostow Ravanan, who together control 13.32% of the company, have been holding talks with Baring PE Asia, Chrys Capital and KKR, seeking a deal with friendly PE investors to acquire Siddartha’s shares so that they continue to hold the reins

WARNING LETTER
Natarajan is said to have told the L&T board of his shock that a hostile takeover attempt was being mounted. It had alarmed Mindtree stakeholders, including institutional investors, clients and customers and employees, he said. They had told the management they wouldn’t want to be part of an organisation that is culturally different from Mindtree or where there are minimal revenue and cost synergies, he said.

Natarajan argued that several large IT services providers had failed to integrate acquisitions and said a merger between Mindtree and L&T Infotech would be value destructive for all. Based on interactions with the L&T top brass, the Mindtree team had been led to believe that L&T wanted its support and had even ruled out any “hostile” attempts.

Both had also disagreed on various business and governance matters, he said. Therefore, Natarajan warned the board to weigh carefully the implications of a hostile transaction for L&T and its stakeholders.

“We are in silent period and we cannot communicate anything,” said Mindtree chairman Natarajan by text and on the phone. A questionnaire sent to him remained unanswered.

L&T COUNTER STRATEGY
After L&T’s board approved an enabling resolution in January to engage with Siddhartha to explore a trade, it has been in touch with institutions and family offices that are key public shareholders. The L&T board met on March 5 for three hours, during which the Mindtree deal was discussed, said people with knowledge of the matter.

Sources close to L&T rejected Natarajan’s arguments. If a deal does take place, L&T will keep Mindtree separate from its two technology companies L&T Infotech and L&T Technology Services for the time being, they said.

L&T Infotech has grown 2.5x in the last three years in market capitalisation in the last three years and has maintained margins (16%) that are steadily improving. Mindtree on the other hand was trading at a high of Rs 1,180 per share early last year and is now at Rs 950 levels, although it’s recovered from a 15% drop on October 19 after second-quarter earnings came in below expectations. The company’s 10% operating margins and growth are under pressure and it has only one large client in Microsoft.

“The pending announcement of Siddhartha stake sale is probably the only reason the stock is seeing new highs—a clear indication that the minority shareholders are keen for a leadership change,” said an official working on L&T’s strategy. (Source: Economic Times)


Vodafone Idea board meet Mar 20 on rights issue

Bagged 75 contracts in India last year, most non-telecom: Nokia Vodafone Idea has called for a Board meeting on March 20 Wednesday to discuss the rights Issue, whereby the telecom operator plans to raise Rs 25,000 crore. Vodafone Idea has called for a Board meeting on March 20 Wednesday to discuss the rights Issue , whereby the telecom operator plans to raise Rs 25,000 crore .

“... a meeting of the Board will be held on Wednesday , March 20,2019, to consider , discuss and decide , inter alia, various matters in connection with the Rights Issue , including the terms and conditions , such as the instrument, issue price , rights entitlement ratio , record date , timing of the Rights Issue and other related matters ,” said the telco in a regulatory filing on Sunday.

The telco had finalised rights issue to raise Rs 25,000 crore to help bolster countrywide 4G coverage and take on Bharti Airtel and Reliance Jio Infocomm. The Vodafone Idea board had approved the offer and issue of fully paid up and/or partly paid up equity shares of the company and/or other securities convertible into equity shares, including but not limited to, compulsorily convertible debentures, for an amount aggregating Rs 25,000 crore by way of a rights issue, the company had earlier announced in January. (Source: Economic Times)

Bagged 75 contracts in India last year, most non-telecom: Nokia

Bagged 75 contracts in India last year, most non-telecom: Nokia The company won 15 new deals in the cable operator and internet service provider (ISP) segment last year. Nokia said it won 75 contracts last year in India, most of them coming from beyond mobility, or the non-telco space. Carriers are getting ready for 5G by end-to-end modernisation of networks, offering bigger growth opportunities.

The company won 15 new deals in the cable operator and internet service provider (ISP) segment last year, Nokia’s India market head Sanjay Malik told ET, taking the total count to 25. “We have achieved growth in nine quarters (year-on-year) straight in India. We have seen growth in both mobility and beyond telco spac,” Malik said.

He said in the wireless space, 4G expansion by Indian operators will continue to drive growth for the company as mobile phone operators look for capacity and upgrade systems. “They are getting their network ready for 5G with their deployment of massive MIMOs and small cells on TD-LTE technology,” Malik said. In addition, phone companies to modernise backhaul or data transfer will also open up new revenue opportunities for the company this year.

Nokia and Chinese gear companies Huawei and ZTE are bidding for wireline contracts of Vodafone Idea, which is expected to award new contracts soon, its chief technology officer Vishant Vora told ET recently.

Nokia is aggressively targeting deals from enterprises outside the traditional telecom service provider segment in search of new revenue opportunities. It is currently in talks with webscale companies for data centre connectivity.

“Global players are coming to India and are looking to set up data centres. India players are looking to do the same. We are expecting good growth this year in this space,” Malik said, adding that Nokia sees opportunities in the enterprise segment. The company is especially targeting sectors such as banking and finance, transportation and railways. (Source: Economic Times)

Vodafone Idea in talks to sell mobile tower stake, optical fibre assets for Rs 20k cr

Vodafone Idea in talks to sell mobile tower stake, optical fibre assets for Rs 20k cr The company is also planning to raise Rs 25,000 crore through a rights issue to fund its capital expenditure and pare debt. Vodafone Idea is likely to mop up about Rs 20,000 crore from its proposed stake sale in mobile tower firm Indus Tower and monetisation of optical fibre assets, sources said.

India’s largest telecom operator plans to use the funds for lowering its debt, which stood at Rs 1,23,660 crore at the end of 2018. “Vodafone Idea has received combined valuation of around Rs 20,000 crore for mobile towers and optical fibre assets that it is planning to sell. Discussions have started around it,” an industry source said.

The company had earlier announced its plan to sell 11.15 per cent stake held by the Aditya Birla Group in Indus Towers as well as 1.56 lakh kilometers of optical fibre assets.

“Indus stake is worth about Rs 50 billion (Rs 5,000 crore) today. We have 156,000 kms of fibre. We have not given any guidance on monetisable value,” a Vodafone Idea spokesperson said.

The company is also planning to raise Rs 25,000 crore through a rights issue to fund its capital expenditure and pare debt.

The promoter shareholders -- Vodafone Group and Aditya Birla Group -- have reiterated to the board that they intend to contribute up to Rs 11,000 crore and Rs 7,250 crore, respectively, as part of the rights issue.

They have also said that in case the rights issue is under-subscribed, each of the promoter shareholders reserves the right to subscribe to part or whole of the unsubscribed portion.(Source:The Hindu BusinessLine)


Google rolling out Chrome 72 with bug fixes, latest features

Google rolling out Chrome 72 with bug fixes, latest features Users can find an app shortcut by long pressing or right-clicking on an Android app,' Google said. The update also brings Google Assistant and Android 9 Pie to more Chromebooks. Google is rolling out the new update for its search browser, Chrome 72, with bug fixes, security updates and newer features like external storage access for Android apps including microSD cards and USB drives along with Picture in Picture (PiP) mode for Chrome sites.

With Chrome 72, Google has optimised the browser for touchscreen devices in tablet mode and added app shortcuts for Android apps that are now searchable in the launcher, the company wrote in a blog post on Saturday.

"Users can find an app shortcut by long pressing or right-clicking on an Android app," the post said.

The update also brings Google Assistant and Android 9 Pie to more Chromebooks after a short testing period on the 'Pixel Slate' device.

The update also features a page about touch-gestures in Chrome's built-in screen reader -- ChromeVox -- tutorial.

"Within the screen reader, we have added a setting in the ChromeVox options page that would read anything under the mouse cursor," the post added. Additionally, Chrome 72 would allow files saved via Backup and Sync on Google Drive to be available in the Files app under the My Drive/Computers menu option.

Systems would be receiving the updates over the next several days, the post noted. (Source:Mint)

RCom lays out debt resolution plan

RCom lays out debt resolution planRCom, controlled by businessman Anil Ambani, last week said it will seek fast-track resolution through India's National Company Law Tribunal. Indian telecoms company Reliance Communications Ltd (RCom) will propose a plan to sell its telecom infrastructure assets, airwaves and real estate to resolve its debt, the firm said on Sunday.

RCom, controlled by businessman Anil Ambani, last week said it will seek fast-track resolution through India's National Company Law Tribunal (NCLT).

The company's current debt to lenders stands at 380 billion rupees ($5.32 billion) of which it owes 198 billion to local lenders and 182 billion rupees to foreign lenders, a spokesman for RCom told Reuters.

The company said its new proposal resembles a previous plan, which was hampered however by a lack of regulatory approvals and legal battles. "Substantial unsustainable debt and liabilities" would be extinguished under the NCLT process and it would be able to overcome challenges raised by minority lenders.

RCom has reported a string of losses during a price war triggered by the market entry of Reliance Industries' telecoms venture JioInfocomm, owned by Mukesh Ambani - Asia's richest person and Anil Ambani's older brother.(ETTelecom)

Reliance's foray into e-commerce will reduce digital: T V Mohandas Pai

Reliance's foray into e-commerce will reduce digital: T V Mohandas Pai 

Investment guru and former InfosysNSE 1.92 % CFO T V Mohandas Pai Saturday said the foray of Mukesh Ambani's RelianceNSE 2.66 % into India's e-commerce space would allay fears of digital colonisation and dramatically lower costs, immensely benefiting the consumers.

"One thing is certain that consumers and India will be a winner, and in online retail, the fear of becoming a digital colony will recede with the entry of a formidable Indian entity, Reliance," he told PTI in an interview here.

Reliance seems to be creating next generation retail network which has the potential to radically change the dynamics of retail in a fast growing economy, Pai said, adding that "it would dramatically lower costs, reduce inefficiencies in supply chain, reduce waste and deliver better. This will immensely benefit consumers."

Pai's comments come in the wake of Ambani's plans to create an online-to-offline platform at the Vibrant Gujarat Summit and urging Prime Minister Narendra Modi to take steps to end increasing "data colonisation" by global corporations.

Ambani, who is Chariman of Reliance Industries, drew parallels between Mahatma Gandhi's movement against political colonisation and call for a revolution against data colonisation and pressed for control and ownership of India's data by its own people, not by corporates.

Reliance is truly a formidable competitor as it has capital, technology, networks, physical retail presence, a long term vision and the passion to win, he said.

Reliance's next generation retail network is powered by a robust fiber network with an efficient supply-chain giving consumers an online offline experience of their choice.

Pai noted that exciting times were ahead with the entry of Reliance into the e-commerce space as the existing online players have grown on customer discounts blowing up nearly Rs 50,000 crore in capital through discounts and infrastructure.

"Jio has created a national network of mom and pop stores and other retail along with their own network on a broadband fiber network.

With their existing retail network they will be a formidable competitor to the Big online retail players.

For retail to succeed, the supply chain and distribution are critical," he said.

The online retailers create the distribution capability through their tech portals which has a global reach but the back end supply chain remains the same as goods need to be delivered, the former Infosys CFO said.

"The business is now moving to an online offline model as consumers still love the physical shopping experience in many categories," he added. (Source: Economic Times)

Infibeam divests subsidiary to Ingenius E-commerce for Rs 60 cr

Infibeam divests subsidiary to Ingenius E-commerce for Rs 60 crPost-acquisition, Ingenius to strengthen technology capabilities, expand merchant base and distribution across product segments Infibeam Avenues said it has divested its wholly-owned subsidiary Infinium (India) Ltd (IIL) to Ingenius E-commerce for Rs 60 crore. The Memorandum of Understanding (MoU) was executed on January 19 and the expected date of completion of the deal is January 31, 2019, it added.

”...the company (Infibeam Avenues) has divested its ownership with control in its wholly-owned subsidiary ieInfinium (India) Ltd to Ingenius E-commerce...the consideration received from the sale is Rs 60 crore,” Infibeam said in a BSE filing.

In a separate statement, Ingenius E-commerce -- which owns and operates B2B aggregator portal Tradohub for industrial goods -- said it has entered into a binding agreement with Infinium India to “invest and acquire 100 per cent equity stake with control” at a consideration value of Rs 60 crore.

Ingenius said it is growing at more than 50 per cent year-on-year with an annual revenue of Rs 300 crore. In the last three years, it has registered more than 10,000 small and medium enterprises (SMEs) across several product segments like food and agriculture, polymers, chemicals, pharmaceuticals, metals and others on its platform.

IIL, on the other hand, has strong engineering team that works on design and implementation of large technology solutions involving hardware, software, satellite and digital communications.

“Tradohub has been growing by meeting the requirements of SMEs and by making them competitive in the digital ecosystem. The acquisition of IIL will help the company accelerate growth by targeting SMEs in consumer-focused sectors where there is significant momentum and an opportunity to serve the growing requirements,” Ingenius E-commerce Chairman Akash Domadiya said.

Currently, majority of IIL revenues comes from trading and distribution of consumer products and providing e-commerce solutions to government and institutions with focus on semi-urban and rural India using V-SAT connectivity, the statement said.

“With the acquisition of IIL, Ingenius expects to strengthen its technology capabilities and expand the existing merchant base and distribution across other product segments including but not limited to IT products, appliances, software, consumables and services,” it added. (Source: The Hindubusiness Line)

Samsung readies for next round of battle with Xiaomi with online exclusive affordable phones

Samsung readies for next round of battle with Xiaomi with online exclusive affordable phonesSamsung’s new M-series of smartphones will be targeted at ‘millennials’ that are flocking to ecommerce platforms to buy smartphones, a customer segment that has played a major role in helping Xiaomi outpace its rival over the last year or so. Samsung is planning an aggressive bid to get back its lost throne from Xiaomi by planning three online-exclusive devices in the sub-Rs 10,000 to Rs 20,000 range, marking a renewed ecommerce push by the Korean major in a price segment dominated by its Chinese rival.

Samsung’s new M-series of smartphones will be targeted at ‘millennials’ that are flocking to ecommerce platforms to buy smartphones, a customer segment that has played a major role in helping Xiaomi outpace its rival over the last year or so.

“The new series is designed around India’s millennial consumers. We expect to double up our online business. That's a significant jump in our online part,” Asim Warsi, senior vice president with Samsung India, told ET.

He added that Samsung will continue to focus on its offline channel where it is deeply established. “That doesn't change per se. The move is about focusing more on the consumers.”

Asked about the recent tightening of the FDI rules in the ecommerce policy, which, among other points, seeks to effectively bring pricing parity between online and offline channels, Warsi said, “Our business approach will conform to the new policy.”

Xiaomi has managed to maintain a steady lead over Samsung for over a year now, and had a 27.3% market share to its rival’s 22.6%, buoyed by a nearly 50% share in the online space and rapid expansion in its brick-and-mortar channel as well, in the July-September period, as per IDC.

Asked if the latest series will help the company drive volumes and get more market share, Warsi said: “market share is a by-product of various actions and business efforts that go in.”

He added that Samsung finished the October-December 2018 quarter with 40% market share by value, as per the GFK data, with a “healthy growth over the previous year”.

Neil Shah, research director, devices and ecosystems at Counterpoint Research, however, was skeptical about Samsung’s chances to break Xiaomi’s hold on the ecommerce space, saying the Korean company is a year late with this series, since the online average selling prices have moved beyond Rs 10,000.

“This new series would have done well for Samsung in the offline channel, which contributes to around 80% of its India handset sales…Samsung’s only chance in the online channel is if they match the pricing and specification of players like Xiaomi to offer better value for money,” Shah said, adding that it could bundle accessories and services.

Samsung, on its part, is pulling out all stops with this new series, introducing a 5000 Mah battery in a device for the very first time, packed with fast charging. One of the three devices will also come with a three-camera setup.(Source:ETTelecom)


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