Spandeal Plans to go Public

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sharad Gupta, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur


 

Business Standard reported on 11th April, 2015, in article “Snapdeal plans American listing in 2016-17” about the Snapdeal’s  plan to go public. Delhi-based e-commerce company Snapdeal just like it’s arch rival Flipkart is preparing itself for issuing its IPO in US markets. The valuation is estimated to be 5-6 billions. Snapdeal progress as reported by the company sources report about the appointment of merchant bankers who will facilitate the listing process in US.

This IPO is targeted to raise capital to expand its operations. It is also estimated that this will allow a few investors to exit from the company. The move to bring in bankers, will help the company which is in its initial stages to be prepared for legal inquiry and other formalities before it is open to public.

In 2013, there were plans to launch an IPO, but were left midway and weren’t executed because the firm shifted its focus to meeting stiff competition from Flipkart for the e commerce platform.

An expert from industry, Mr Yugal Joshi said, “Snapdeal has a healthy valuation and with investors like Softbank it should be able to conduct a successful IPO whenever it wants”. He also mentioned that the firm should prepare itself, as it is a young firm, soit should analyse if it will be able to withstand the scrutiny a listed company has to undergo.

Snapdeal’s largest investor is Japan’s SoftBank. Other Indian investors are Tata Group chairman, Ratan Tata and Wipro chairman, Azim Premji. It is also backed by American e commerce firm, eBay. Other investors include Nexus Venture Partners, Indo-US Venture Partners, Bessemer Venture Partners, Kalaari Capital, Intel Capital, Blackrock and Temasek Holdings. There was a unconfirmed news about the plan Snapdeal had to sell its stake to Alibaba, Chinese e commerce giant, but was not executed. This deal was rejected as it was seen as over valued.

Sources said Flipkart’s IPO was likely in the next 18 months. Flipkart is backed by Russian billionaire Yuri Milner’s DST Global, Singapore’s sovereign wealth fund GIC and Tiger Global. It has taken several initiatives to strengthen its leadership and trim costs.Valued at $12 billion, Flipkart raised $2 billion in 2014. Since its launch in 2007, the company has raised $3 billion from a clutch of investors. Snapdeal raised $1 billion last year.

 

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Ultratech Strategy to maintain its leadership in Cement industry

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sharad Gupta, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur


Business Standard reported on 24th March, 2015, in article “Ultratech plans share swap to takeover Century’s cement arm”  about the strategy adopted by Aditya Birla’s cement group Ultratech to meet the stiff competition it is facing from Holcim-Lafarge entity. The valuation estimated of the century cement arm is approximately, 10,500 crore.

This move will make the Ultratech to retain its number one position in cement domain, adding 13 million tonnes per annum to its present capacity of 65 million tonnes. This move was a reaction to the merger of Swiss company Holcim with a Euro firm Lafarge increasing its capacity to 71 million tonnes per annum. The deal of Ultratech is awaiting the boards approval of both involved firms. Though both the firms denied any such proposals under discussion, few insiders still confirm the talks going on.
The consolidation will help both the firms in cutting costs and synergise their operations. After the proposed deal, Birla family will own more than 50% stake in Century group and stake in Ultratech will come down to 60%. With this unconfirmed news, shares of both firms rose to there local high. Even bankers believe this move will boost Century group increasing its valuation. The firm will be retaining its other businesses.
Ultratech is also increasing its capacity through acquisitions of other cement businesses. In December, it acquired Jaiprakash associates cement business, which made its overall capacity to 65 million tonnes, a little lower than its competitor.
Even if this deal doesnt turns out to be true, Ultratech will be able to reach 71 million tonnes capacity  by fiscal year 16. This will help the firm to gain its leadership position in the cement industry.

Telenor’s plans to buy Docomo

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sharad Gupta, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur

 


Business Standard reported on 11th March, 2015, in article “Telenor, Tata Tele merger talks reach final stages”, about merger talks between Tata Tele and Norway’s Telenor of there wireless telephonic operations in India. It is said, as per the valuation calculations of both the firms, Tata Tele will be a minority stakeholder in this merger deal. All the operations will be majorly controlled by Telenor.

Final Agreement is planned to be signed in next few days in London where all the senior officials of both the firms will be meeting to discuss the partnership agreement. An inside source also reported that they will be declaring about the merger soon, after the declaration of Government policy on Telecom sector after the  of this season by Finance Minister.

The Tatas have invested Rs 26,000 crore in Tata Teleservices’ equity; the company has debt of Rs 24,000 crore. The Tata group has sought the government’s permission to buy back NTT DOCOMO’s 26.5 per cent stake in Tata Teleservices for Rs 7,200 crore, at Rs 58 a share. Tata Sons had engaged Price Waterhouse to value its stake in Tata Teleservices and according to a report by Price Waterhouse, the fair value of Tata Teleservices shares stood at Rs 23.34 apiece. The source quoted earlier said the merger with Telenor would take place at about this valuation.

As stated in the December ended quarter reports, Telenor’s Operating loss doubled to Rs 276 Crore as compared to Rs 132 crore last year. It also to be noted that revenue rose by 38 percent. This year company also added around 2.3 million new users to its network.

Talking about the Tata Tele reports, it faced a net loss of 6,166 crore on total operating income of 10,484 crore in FY14, compared to a net loss of 1858 crore on almost the same operating income. In FY15 there was increase in the loss of firm in the quarters.

In my view, this strategic move by both organisations will be a win win situation, with Telenor having an upper hand. Tata Tele is currently in a bad shape, with Docomo also filed an arbitrage policy against it earlier this year. Telenor is also in red sign, but showing improvement in revenues. With both the names coming under one roof, both will be able to use there huge network of subscribers to increase there profits and grow.This deal should have happened long time back, in around 2012, but was not finalized due to certain reasons, which costed them losses in these years.

Aditya Birla Chemicals and Grasim Industries Merger

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sharad Gupta, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur


The Times of India reported on 10th February, 2015, in article “Vision to Unify”, about merger deal confirmation of Grasims and Aditya Birla Group.  Aditya Birla group announced a restructuring on Wednesday under which Aditya Birla Chemicals (India) Ltd (ABCIL) will merge with Grasim Industries as it looks to consolidate similar businesses under one roof.The deal has proposed that ABCIL shareholders will be receiving one share of Grasim for every 16 shares of ABCIL they have. Grasim will also be issuing 14.62 lacs new shares increasing its equity to 93.31 crores.This deal is an attempt to transform Grasim Industries into a chemical conglomerate, which is in line with Kumar Mangalam Birla’s plan of consolidating similar business under one. The group also shifted its cement Business, Indian Rayon which was merged with Ultratech cements. On the same lines copper  business of Indo Gulf was merged with Hindalco.

The news release reported, that this merger will consolidate Aditya Birla group’s chlor-alkali business into Grasim and strengthen its existing portfolio of viscose staple fibre, caustic soda and allied chemicals in standalone company. The merger will enable the geographical diversification for Grasim through the addition of ABCIL’s manufacturing facilities spread across the country. It also enables the business to capitalise growth opportunities by bringing in operational and financial synergies, backed by Grasim’s strength. The consolidation is in line with Aditya Birla Group’s philosophy to unify similar business in one company.“Grasim will be the vehicle for all chemical businesses,“ said Adesh Gupta, director, Grasim Industries.

In my view it will enable the business to capitalize growth opportunities by bringing in operational and financial synergies, backed by Grasim’s strength. This also affected the stock prices with the news. The stock opened at Rs 235, touched a high of Rs 234 and a low of Rs 231 on the BSE. Meanwhile, Shares of Grasim are trading nearly half a percent high at Rs 3,837 on the BSE.

Samsung – Still leader but losing ground in India

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Sharad Gupta, MBA 2014-16, Vinod Gupta School of Management, IIT Kharagpur
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On the 7th of February, 2015, gsmarena.com (the best website for the reviews of latest devices) quoted that Samsung will lose its top position soon in Smartphone sector. Article quoted that “Motorola has shipped over 10 million smart phones last quarter, up a whopping 118% compared to the same period of 2013”. Motorola has been providing good quality phones with latest features in much cheaper rate.

On the 8th of February, 2015, the Business Standard published that Korean mobile set giant Samsung is still selling maximum handset in India but losing ground to various rivals like Micromax, Karbon, Lava and Motorola. An article quoted:” According to the latest data from CyberMedia Research (CMR), Samsung is “losing its firm grip”, with its share declining to 16.5% at the end of December 2014 from 20.3% at the beginning of the year”. The sales of Samsung have following constant curve whereas the graph of sales of Motorola and Micromax has been drastically increasing. It has lost its ground maximum in Smartphone as its market share decline from 43.2% to 29.3% by end of December 2014.

I believe that the reason why Samsung is losing its ground is its lack of innovation and its product offerings .It has not innovated much in designs and all the models of Samsung is on similar lines in terms of design whereas Motorola has launched Moto G and Moto E which are very sleek, stylish and latest features in much less rate than Samsung models. Other vendors like Xiaomi, Micromax are selling at brisk rate as their pricing is manageable. Samsung needs to strategize how they needs to capture the market and brainstorm about their pricing strategy as well as the innovation they need to bring in. The one alternative they can do according to me is that they can capture one of the less renowned brand like Karbonn  or new players like OnePlus to capture more market share.