INDIAN ECONOMY: OVERVIEW, GROWTH & DEVELOPMENT
Garib Rath train restored on 2 routes
The Railway Ministry on Friday rolled back its decision to replace services of Garib Rath in Kathgodam-Jammu and Kathgodam-Kanpur route by mail or express trains, and the services of the low-cost no-frills AC train will be resumed from August 4, officials said.
It said due to temporary shortage of coaches on Northern Railway, two pairs of weekly trains of Garib Rath service were temporarily operated as express services.
“Services of Train no. 12207/08 Garibrath Express between Kathgodam and Jammu Tawi and Train no. 12209/10 Garibrath Express between Kanpur and Kathgodam restored with effect from August 4, 2019,” the rail ministry tweeted following protests over discontinuation of the two trains recently.
An official from the ministry said no plans are underway to replace the Garib Rath trains, 26 of which are operational across the country.
The initiation of Mail or Express trains in the said route also means that train fare would go up passengers. For example, a Delhi-Bandra Garib Rath ticket that was priced at Rs 1,050 will cost Rs 1,500 – Rs 1,600 in case of Express trains.
Govt pushes for E-Tolling
To ensure seamless traffic and prevent congestion at toll plazas, the government Friday said it has decided to declare all lanes at toll fee plaza on national highways as ‘FASTag lanes’ from December 1.
However, among all lanes, one ‘hybrid lane’ will be allowed at every toll plaza to facilitate and monitor over-dimensional or oversized vehicles, where FASTag and other modes of payment will be accepted.
In a statement, the Ministry of Road Transport and Highways said this lane will also be converted into FASTag-only lane in a time-bound manner.
After December 1, non-FASTag users will be charged double the fee if they pass through FASTag-only lanes.
FASTag is a prepaid tag that enables automatic deduction of toll charges and lets the vehicle pass through the toll plaza without stopping for the cash transaction.
“The Ministry of Road Transport and Highways has decided to declare all lanes in all toll fee plazas on national highways across the country as dedicated ‘FASTag lanes’ from 1st of December this year,” the ministry said.
According to the National Highways Fee (Determination of Rates and Collection) Rules, 2008, a FASTag lane in a toll plaza is reserved exclusively for the movement of FASTag users.
In a letter to the National Highways Authority of India (NHAI) on Friday, the ministry asked the authority to ensure strict implementation of the new fee rules at every toll plaza on the national highways.
The decision has been taken in order to promote faster payment of fees through the digital mode so that vehicles can move through seamlessly, and traffic jams at the toll plazas can be prevented.
The radio-frequency identification (RFID)-based FASTag is affixed on the windscreen of the vehicle. It allows for direct payment of fee from the prepaid or savings account linked to it and enables vehicles to drive through without stopping for transactions.
Internet IPOs: is there appetite for loss-making start-ups?
Online marketplace IndiaMART InterMESH Ltd made a strong statement in the stock market. The company’s initial public offering (IPO) was oversubscribed 36 times and its stock closed 34 per cent higher on the debut day of July 4.
Expectedly, this has led to a lot of optimism among the venture capital community and start-ups. They see this success as a sign of things to come – many more potential IPOs over the next few years that will open the doors of exit for exit-starved investors.
Venture Intelligence, a company that provides data and analysis on private company financials, analysed if there is indeed any appetite for more such Internet IPOs. The findings are interesting.
IndiaMART is not the first company in India’s Internet space to go public; there are quite a few examples.
“The most successful from a stock performance perspective is InfoEdge (IPO in 2006). The shares of two of the other VC-backed Internet companies that IPO-ed this decade – JustDial and Matrimony.com – have not done too well,” Venture Intelligence stated in a note.
“The only pure play e-commerce company to list in India, Infibeam.com, has also disappointed public market investors. Online travel services companies which listed on the Nasdaq, MakeMyTrip (2010 IPO) and Yatra, have also not made money for their public market investors. The 2000-era Indian “dotcoms” which went on to list in the US, Rediff and SIFY, are now unfortunately largely forgotten stocks,” the firm added.
One flagship phone to be launched each year in India
After disrupting the budget smartphone market, Xiaomi is eyeing the premium smartphone segment in the country. To cater to the premium flagship market, the company has introduced the Redmi K20 Pro with the same set of features as on some of flagship devices.
“Earlier, we largely focussed on phones in the price bracket of less than Rs 20,000, which covers about 95 per cent of the market. The other 5 per cent prefers to buy phones above Rs 20,000 price range. Our vision is to make innovative technology accessible to all our Mi fans, emphasising the same on all our products, be it the affordable category or the flagship models, all of which come at an honest pricing as compared to other industry offerings,” says Manu Jain, Managing Director Xiaomi India and Vice President Xiaomi.
This isn’t Xiaomi’s first attempt in the premium smartphone segment in the country. In 2016, the company had launched the Mi 5 (Rs 24,999) and the Mi Mix 2 (Rs 35,999) in late 2017. Last year, we witnessed the launch of a new sub-brand Poco that launched its first smartphone F1 with the best-in-class specifications starting at Rs 20,999.
The Redmi K20 Pro, on the other hand, features a full-screen AMOLED display, in-display fingerprint scanner, pop-up selfie camera, triple-camera module at the rear, Qualcomm Snapdragon 855 processor, and more with a starting price of Rs 27,999. Xiaomi has also introduced the Redmi K20 starting at Rs 21,999 with the device being powered by Qualcomm 730 processor and many of above-mentioned features.
“Taking into consideration the demand of flagship phones and the market size, we plan to introduce not more than one flagship phone in a year,” adds Jain.
Talking about the sudden popularity of this category, Jain says that over the last few years, the smartphone market has evolved majorly in India, and there is a huge potential for this segment to further evolve in future. “With the positive rate of increase in consumer disposable income, we are also witnessing growth in the market size of above Rs 20,000 category as people aspire to buy flagship-level phones, which offer the best and the most powerful features and unmatchable user experience. In addition, consumers are also increasingly relying on their smartphones for smoother business and day-to-day functions.”
Commenting on the projected growth and potential of Rs 20,000 to Rs 35,000 price category, Jain adds, “The category of flagship phones or expensive phones (over Rs 20,000) is now growing at a faster pace as compared to before. Consumers are on a lookout for buying phones, which offer the best performance, specifications and design even if they come at a higher price. They are comfortable spending more money, provided they get what they are looking for – best specifications and innovative features. Therefore, there is immense potential in this category if the product offers cutting edge features and specifications at an honest pricing.”
Dabur India appoints Amit Burman as chairman
Dabur India on Friday named Amit Burman its chairman, as the next generation takes the reins at one of the nation’s oldest consumer goods companies.
The 50-year-old, a fifth-generation member of the founder family, is the youngest chairman at Dabur with annual revenue of more than Rs 8,500 crore. He was being groomed for the post for the past two years, a company spokesperson said. Son of late GC Burman, he succeeds Anand Burman who has stepped down as a director and the chairman after a 12-year tenure.
Until now the vice-chairman of the company, Amit Burman had in 1997 set up Dabur Foods, a wholly owned subsidiary of Dabur India that was merged with the parent ten years later. He runs also independent food retailing venture Lite Bite Foods, which includes the Punjab Grill, Asia 7 and Street Foods brands of restaurants with more than 100 outlets, including in markets like the US.
Another family scion, Mohit Burman, has been named the vice chairman of Dabur. Anand Burman’s son, Aditya, is joining Dabur India as a non-executive additional director. He will also be a director at Oncquest Laboratories, a clinical pathology and molecular diagnostics company of the group.
Mohit, currently managing director of London Stock Exchange-listed Elephant Capital, has led the Dabur Family Office’s investments in multiple financial services including life insurance, general insurance and asset management, retail and sports. His investments include Aviva Life Insurance, Universal Simon General Insurance and IPL team Kings XI Punjab.
Set up in 1884 by physician SK Burman to sell natural medicines, Dabur now makes a range of packaged brands including Vatika shampoo, Fem skincare, Red toothpaste, Odonil air fresheners, Real juice and Hommade cooking pastes. The company had in January named Mohit Malhotra its chief executive, succeeding Sunil Duggal who resigned also from the board on Friday.
Tata Steel to raise $ 600 million
Tata Steel, India’s largest private steel manufacturer, is planning to raise USD 600 million to finance its domestic operations and to refinance its loans, said Koushik Chatterjee, executive director and CFO, Tata Steel.
Speaking on the sidelines of 112th Annual General Meeting of Tata Steel, Chatterjee said the company would primarily use the fund to meet the capital expenditure of phase 2 expansion at its Kalinganagar plant located in Odisha’s Jajpur district.
Tata Steel Kalinganagar (TSK) has recently been included in World Economic Forum’s (WEF) Global Lighthouse Network, a community of manufacturers showing leadership in applying Fourth Industrial Revolution technologies to drive financial and operational impact. The company claims that it is the first and the only Indian manufacturing plant to be included in the WEF’s Lighthouse Network.
Chatterjee said that the steel maker had set a target of reducing gross debt by USD 1 billion in FY20, after Tata Steel’s merger of its European operations with Thyssenkrupp AG fell apart after failing to meet Europe’s anti-trust requirements. Tata Steel Europe had debt of 2 billion euro as on March 31, 2019.
Tata Steel had signed definitive agreement with Thyssenkrupp AG on June 30, 2018, to combine their European steel businesses to create the continent’s second-largest steelmaker after ArcelorMittal. However, the two companies abandoned plan to merge their steel businesses in Europe after it was blocked by the European Commission.