Amazon partners with Vodafone to set up pick-up points for customers

Amazon.in on Tuesday announced its partnership with Vodafone Idea Limited to set up pick-up points in Vodafone stores for its customers.

The partnership will enable Amazon.in customers to choose their nearest Vodafone store as a pick-up point to collect their packages at a convenient time, it said in a statement.

Amazon India will leverage the wide reach of Vodafone stores to provide a "safe and convenient" option for customers who may not be available during the day to receive their package, the company said.

Customers can select these points as a pick-up location on the checkout page of their order while shopping on Amazon.in.

Currently, the option to choose Vodafone store as a pick up point is available in nine cities including Bengaluru, Mumbai, Hyderabad, Pune, Jaipur, Indore and Ahmedabad.

Stores have been identified as pick up points based on high customer density to provide easy accessibility and convenience to Amazon customers.

Amazon.in aims to double its presence in the Vodafone store network by the end of 2019, it was stated.

Auto crisis: Maruti Suzuki reports 24% decline in sales in September

The country's largest carmaker Maruti Suzuki India (MSI) on Tuesday reported a 24.4 per cent decline in sales at 1,22,640 units in September.

The company had sold 1,62,290 units in September last year, MSI said in a statement.

Domestic sales declined by 26.7 per cent at 1,12,500 units last month as against 1,53,550 units in September 2018, it added.

Sales of mini cars comprising Alto and WagonR stood at 20,085 units as compared to 34,971 units in the same month last year, down 42.6 per cent.

Sales of compact segment, including models such as Swift, Celerio, Ignis, Baleno and Dzire, fell 22.7 per cent at 57,179 units as against 74,011 cars in September last year.

Mid-sized sedan Ciaz sold 1,715 units as compared to 6,246 units earlier.

Similarly, sales of utility vehicles, including Vitara Brezza, S-Cross and Ertiga, declined marginally at 21,526 units as compared to 21,639 in the year-ago month, MSI said.

Exports in September were down by 17.8 per cent at 7,188 units as against 8,740 units in the corresponding month last year, the company said.

Bharti Airtel plans to raise up to $1 bn via bond issue to reduce debt

Telecom major Bharti Airtel is planning to raise funds up to $1 billion (about Rs 7,000 crore) via a bond issue by its subsidiary Network i2i, the proceeds of which will be used to reduce debt.

"...offering of USD denominated Guaranteed Subordinated Perpetual Securities by Network i2i Limited (a direct 100 per cent subsidiary of Bharti Airtel) expected to be rated BB by both S&P and Fitch may follow, subject to market conditions," Bharti Airtel said in a regulatory filing.

Bharti Airtel has appointed a clutch of bankers including BofA Merrill Lynch, Barclays, BNP Paribas, Citigroup, HSBC, J P Morgan and Standard Chartered Bank as joint bookrunners and joint lead managers to organise a series of fixed income investor meetings and calls across Asia, Europe and the US starting Wednesday, it added.

Sources said that the fundraising is likely to be in range of $750 million to $1 billion, and the final figure will be arrived at based on the market response.

The proceeds from the issue will be utilised for pruning debt of Bharti Airtel. Bharti Airtel's debt stood at Rs 1.16 lakh crore as in June 2019.

Meanwhile, S&P Global Ratings has said it expects Bharti Airtel's leverage to remain elevated over the next six to nine months, but improve gradually due to reduced capital spending and increasing stability in its India mobile operations.

"We assess Network i2i Ltd's proposed USD 1 billion subordinated perpetual securities (PERPS) as having intermediate equity content. The PERPS are guaranteed by Bharti. We estimate the issuance will improve the India-based telecoms operator's FFO-to-debt ratio (funds from operations to debt ratio) by about 50 basis points," S&P Global Ratings said.

Adequate security cover provided for loans taken from PMC Bank: HDIL

Housing Development and Infrastructure Limited (HDIL) said on Tuesday that adequate security cover had been provided by the company for the loans taken from PMC Bank.

In a statement to the exchanges, HDIL said, "The company has over a period of time availed of banking facilities from various banks and institutions including PMC Bank in the normal course of business. Adequate security cover in favour of the banks, including PMC Bank, has been created over the assets of the company for these facilities in due compliance with all banking regulations in line with RBI guidelines. All the books of the company are audited and reflect a true and fair picture as regards to the affairs of the company and the group," it said

HDIL said it was facing temporary cash flow issues due to the external environment in the real estate sector and it was because of the same that the company had been admitted under IBC 2016.

"With relation to borrowings from PMC, we have already issued letters requesting an appointment with the administrator in charge of the bank to put forth the true and correct picture and to discuss a strategy to safeguard the interest of all stakeholders, including PMC Bank and its depositors," it added.

It said it had been made aware of certain regulatory action against PMC Bank and its management. "It is also learnt that certain action is being initiated against HDIL and its promoters. We are unaware of any action against HDIL and its promoters," the company said.

Top Vodafone officials meet telecom secretary ahead of spectrum auctions

Vodafone Chairman Gerard Kleisterlee, Chief Executive Officer Nick Read and Vodafone-Idea Managing Director and CEO Ravinder Takkar on Monday met telecom secretary Anshu Prakash at a time when the government is busy preparing for the upcoming spectrum auctions.

Vodafone Idea has been seeking a two-year moratorium on its annual spectrum payment citing debt and stress on balance sheet.

Talking to media after the meeting, Nick Read said, “We are absolutely focused on the integration of business between Vodafone and Idea.”

Both Read and Kleisterlee refused to comment on the outcome of the meeting with Prakash or the company’s future course of action in India.

This is the second time in a month that executives of Vodafone-Idea met government officials. Aditya Birla Group Chairman Kumar Mangalam Birla, in September, had called on telecom minister Ravi Shankar Prasad for deferring statutory payments in a sector that was not generating enough cash to even service loans.

Vodafone and Idea participated in five spectrum auctions in 2010, 2012, 2014, 2015 and 2016 before merging their businesses in August 2018. In the auctions, Vodafone acquired spectrum worth Rs 79,343 crore: the highest in terms of value compared to bids made by other operators. Idea purchased spectrum worth Rs 63,597 crore in the auctions.

Vodafone Idea’s net loss in the first quarter of the current financial year narrowed to Rs 4,873.9 crore for the April-June quarter, helped by a change in accounting standard and lower operating costs. Its revenue fell as some subscribers left and others moved to lower tariff plans.

The adoption the Ind AS 116 accounting standard resulted in a positive impact of Rs 120 crore in profit after tax (PAT) for the quarter.

Revenue for the quarter ended June fell 4.3% on quarter to Rs 11,269.9 crore, hurt by subscribers leaving due to the company’s minimum recharge plans.

The telecom sector has been battered by falling tariffs, eroding profitability, and mounting debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by Mukesh Ambani.

The industry has been seeking urgent relief measures for the troubled sector, entailing cut in levies like licence fee and spectrum charges, and release of GST input tax credit locked up with the government.

Paytm Mall vows big push this festive season for traditional retailers

Paytm Mall said it would generate at least Rs 500 crore in actual sales for its offline brick-and-mortar retailers this festive season. It says so at a time when trader bodies are at loggerheads with Amazon India and Flipkart over the massive discounts during such sale drives.

Paytm Mall is the online shopping platform created by Paytm, the e-commerce payment system and financial technology entity. We have, says the former, been working hard on our omni-channel model. This year, the company believes, most of the ‘leads’ it generates online would convert into sales offline.

Over the past six months, it has worked out massive discount and cashback schemes, with more than 100 brands and major offline retailers. Overall, Paytm Mall says, it is targeting not less than $2.1 billion (Rs 14,900 crore) in gross merchandise value (GMV) for the entire year.

As Amazon India has been doing, Paytm Mall has been concentrating a lot on the market outside the tier-I cities. While these metropolitan areas contribute 35 per cent of its business, the rest comes from elsewhere.

During the festive season itself, the company says it is aiming at $300 million (Rs 2,100 crore) in GMV. It has got on board over 30,000 new retailers and these stores will offer their catalogues on the Paytm Mall app, in-store pick-up, local deliveries and exclusive brand vouchers. The company has dedicated a team to address the needs of offline retailers and help their transition online.

The partnership will help it get new users, strengthen its assortment and expand its reach to the neighbourhood brand outlets. The firm does not own or operate warehouses; instead, it partners with sellers and encourages them to use local courier services for delivery. The target is to, within two years, show a positive figure on operating earnings, by addressing the issue of logistics cost.

“In preparation for the coming festive season, we are aggressively on-boarding retail stores and collaborating with new brands. We have also introduced exclusive brand vouchers...(and) are confident on achieving two-fold growth in our user base during this period,” said Srinivas Mothey, senior vice-president.

In the run-up to the festive sales, Paytm Mall has also broughtn eBay’s global inventory on its platform. This catalogue of over a million products includes categories such as toys, collectibles, fashion, automobile accessories, gifts and decor festive items.

“Paytm Mall is rapidly expanding its World Store which makes international brands available to Indian buyers at its platform. The company also aims to become the launch partner for international brands to cater to the Indian market,” the company said.

Why do credit rating agencies keep missing big Indian company defaults?

Mounting debt failures in India have been catching rating companies off guard, underscoring continued challenges a year after the landmark failure of shadow bank IL&FS increased scrutiny of the industry.

Defaults at companies including Dewan Housing Finance Corp., Cox & Kings Ltd. and Altico Capital India Ltd. have occurred even as their long-term ratings indicated very low to moderate risk of non-payment.

“Raters have not been able to detect stress in time,” said Ashutosh Khajuria, chief financial officer at Federal Bank Ltd. “Cutting credit profiles after the defaults is no rocket science.”

There’s a lot at stake as India tries to navigate a shadow-banking crisis and expand its debt market. The lack of more forewarning on payment problems has fueled questions about the quality of ratings, and could keep some investors away from corporate bonds, hindering market development.

India’s major rating firms include Crisil, the Indian unit of S&P Global; ICRA, the local unit of Moody’s Investors Service; Fitch-owned India Ratings & Research; and Care Ratings.

Crisil declined to comment on industry practices, adding that it didn’t rate most of the large credits that defaulted recently. ICRA, Care and India Ratings & Research didn’t immediately comment.

The securities market regulator strengthened disclosure rules earlier this year after rating firms failed to give ample warning on IL&FS group’s defaults from 2018, which triggered a prolonged cash squeeze in the nation. They now have to reveal annual default rates among the companies they evaluate.The new rules are set to improve the quality of ratings in the industry over time, said Somasekhar Vemuri, senior director at Crisil.

Even after IL&FS failure why credit raters keep missing Indian cos defaults

The regulator also started probes on whistle-blower complaints against two of the raters. Amid those investigations, ICRA decided to terminate the employment of Naresh Takkar as managing director in August while Care sent Chief Executive Officer Rajesh Mokashi on leave in July until further notice.

Rating companies have been looking at ways to improve the quality of their assessments. For instance, Care’s board said that its interim CEO will not be part of rating operations to ensure the independence of ratings.

Some observers say the industry’s problems, in India and elsewhere like in the U.S., are more fundamental. The norm of firms charging issuers for ratings has been a target of criticism since the global financial crisis.

“Ultimately conflict-of-interest remains as long as the issuer pays for his ratings,” according to J N Gupta, managing director at Stakeholder Empowerment Services.

Here are major moves by rating companies in the past year: