Tata Motors will commence deliveries of India’s first electric cargo four-wheeler EV Ace from the September quarter as it seeks to tap into the burgeoning demand for sustainable last mile delivery vehicles by e-commerce companies. The prices of the electrified version of the Ace, the sub-one tonne offering launched in 2005, will be revealed at the time of the commercial launch.
The Tata Group flagship took the wraps off the model on Thursday and signed an agreement with a clutch of e-commerce companies including Amazon, Big Basket, City Link, DOT, Flipkart, LetsTransport, MoEVing and Yelo EV. Cumulatively, it has bagged an order for 39,000 units from these companies for the ACE EV.
“Sustainable mobility is a trend as well as an imperative and is irreversible. It’s a global mega trend. At the at Tata Group and Tata Motors in particular, we have embraced this fully and made it into a business model that integrates sustainability as one of the key pillars,” N Chandrasekaran, chairman, Tata Sons said at the unveiling.
The Ace has been a category creator and the company is deeply encouraged by the interest the EV version has generated. Tata Motors will continue to engage and build e-cargo solutions not only on ACE platform but also in other categories, said Chandra....Read More
ts electric vehicles (EVs) and will look at serving many markets outside India with the range of EVs it plans to bring over the next few years, N Chandrasekaran, chairman of Tata Motors and Tata Sons, said at the unveiling of Avinya, Tata Passenger Electric Mobility’s (TPEM) first pure electric car concept in Mumbai on Friday.
“Our goal is to go global eventually and we are benchmarking to be the best whether it is in terms of software, electric and electronic architecture or the intuitive experience. We have really high aspirations,” said Chandra without divulging details on the markets the company would be keen to tap into with its range.
This will mark the beginning of the globalisation strategy of Tata Motors passenger vehicle business which has been confined to India and South Asia all these years due to the variance in emission standards. The EVs open up a whole new set of possibilities for the company, said Chandra.
The model developed ground up by the Tata Group flagship is expected to go on sale by 2025 and marks a significant step forward in Tata Motors EV journey. Based on the third generation architecture, the word Avinya has been derived from the Sanskrit language and means innovation. It marks the beginning of a new breed of EVs that the company plans to introduce in the coming years....READ MORE
The Tata group is likely to announce a new chief executive officer for Air India in the next few days after its first pick, Turkey’s Ilker Ayci, refused the job due to controversy over his relationship with that country’s president. “The name of the new CEO is being finalised. Since it is an important appointment and as a part of good corporate governance the appointment would be discussed with the board of Tata Sons. There is no decision yet but it will happen in a few days,” said a person familiar with the matter. Tata Sons, the holding company of the group, did not comment. The group took over Air India from the government on January 27 and working on its revamp. While steps have been initiated to improve in-flight service and punctuality, Tata Sons chairman N Chandrasekaran aims to make Air India the most technologically advanced network carrier. A five-member committee is overseeing the airline now. Tata group nominees too will be appointed on Air India board shortly and the government has already cleared their appointments. These include Chandrasekaran, HUL chairman Sanjiv Mehta and former chairman of General Insurance Corporation Alice Vaidyan.
The 40 per cent correction in benchmark indices from their January 2020 peak has prompted promoters of companies to buy/raise their stake in group companies. According disclosures made by the companies to stock exchange, promoters of 277 firms large as well as mid-and small-sized companies bought 267 million equity shares worth of Rs 3,745 crore in the month March alone via open market purchase.
Indian markets have seen an unprecedented correction over the last two months with the Nifty50 and S&P BSE Sensex corrected 40 per cent and 39 per cent from their respective all-time highs touched on January 20, 2020. The benchmark indices slipped 23 per cent thus far in the current month. Last week, the indices hit their lowest level since May 2016.
Analysts say the promoters are using this opportunity to buyback is a typical feature of a bear market that serves two basic purposes - one is to buy shares at an attractive price and the second is to instill confidence in the minds of shareholders that the promoters are still backing the company even in turbulent times. That apart, some promoters also believe cash could be put to better use through buybacks rather than being locked up in a fixed deposit or remain idle.
“The trigger for hiking stake has been the price crash. If the return on capital employed (ROCE) is in double digits and the company is fundamentally sound, it justifies the long-term objectives of the company also. If a promoter is sitting on cash, it is always beneficial to invest where there can be a healthy ROCE going ahead. Buyback is better in such bear markets as the money invested can get better return than a bank deposit or any other investment,” explains G Chokkalingam, founder and managing director at Equinomics Research.
Among the lot, the highest quantum of promoter buying was seen in Tata Group companies that includes Tata Chemicals, Tata Steel, Indian Hotels, Tata Motors, Tata Power and Tata Consumer; Bajaj Group firms Bajaj Finance, Bajaj Finserv, Bajaj Holdings and Bajaj Auto; and Godrej Group companies - Godrej Industries and Godrej Agrovet.
Tata Sons has bought total equity shares worth of Rs 1,011 crore of six group companies during the month. The stock price of Tata Steel, Indian Hotels Company and Tata Power Company slipped between 38 per cent and 46 per cent in CY20. On the other hand, Mphasis’ promoter, Marble II, acquired 7.5 million shares representing 4 per cent of total equity worth of Rs 525 from the open market. The stock of the information technology (IT) services firm hit 52-week low of Rs 612 on March 23, and has corrected 33 per cent in CY20.
A K Prabhakar, head of research at IDBI Capital, too, says that the promoters are utilizing this opportunity to instill confidence in the retail investors via the buyback route. “Valuations are attractive for promoters to buy aggressively in case they have surplus cash in their balance-sheet,” he says.
The promoters of HCL Technologies, JSW Steel, Adani Ports and Special Economic Zone, Mphasis, Maruti Suzuki, Sun Pharmaceutical Industries, GMR Infra and Indiabulls Housing Finance, too, increased their stake in their companies. Many stocks have seen significant and meaningful corrections thus far in the calendar year 2020 (CY20) with prices of several of them crashing more than 50 per cent their respective 52-week high.
Current
Affairs
Full
service carrier Vistara, which has been serving the Indian skies for
more than four years, plans to launch international services in the
second half of this year.
A
joint venture between Tatas and Singapore Airlines, Vistara might
also look at starting medium and long-haul flights, depending on
approvals, amid the grounding of Jet Airways.
"We
see India as a growing market. We are here for the long term,"
Vistara CEO Leslie Thng said on the sidelines of the annual general
meeting of airlines' grouping IATA on Sunday.
Without
providing specific details, he said the airline plans to start
international operations in the second half of 2019.
It
had planned to launch overseas flights in the first half of this
year.
Currently,
Vistara has more than 22 planes and operates around 850 flights every
week.
Last
month, the carrier announced it would take on lease four Boeing
737-800 NG aircraft and two A320 neo planes.
In
2018, Vistara placed its order for purchased and leased aircraft
totalling 50 from the Airbus A320neo family, including A321neos.These
would be for domestic as well as short and medium-haul international
operations, with deliveries scheduled between 2019 and 2023.
Further,
the carrier has bought six Boeing 787-9 Dreamliner aircraft that are
scheduled to be delivered between 2020 and 2021. These would operate
long-haul international operations.Thng said, Vistara can start
short-haul flights but would need more time for long-haul ones.
Ajay
Harinath Singh, a Mumbai-based resident who claims to run diverse
businesses across 11 countries, has submitted an offer to invest in
Jet Airways.
Singh’s
Darwin Platform Group (DPG) is the third unsolicited bidder to stake
a claim for revival of the grounded airline. Others include former
flight steward-turned-entrepreneur Jason Unsworth and London-based
investment firm Adi Partners.Representatives of DPG, including its
Chief Executive Officer Rahul Ganpule met executives of SBI Capital
Markets on Wednesday. The meeting took place a day after top-level
exits at Jet, which is seen as a pointer to airline’s uncertain
future.
Lenders
had called for bids last month and among qualified parties, only
Etihad Airways submitted a conditional investment offer. The Abu
Dhabi airline has said anyone investing more than 5 per cent in Jet
should have its approval. Lenders continue to seek investors to turn
around the airline and are meeting those making unsolicited bids.A
report on Moneycontrol.com said a Russian aviation professional named
Oleg Evdokimov, too, has submitted his expertise to turn around Jet
but he is not interested in picking up a stake.
While
continuing to engage with unsolicited parties lenders are taking
their offers with a pinch of salt. “Discussions are going on to
ascertain their seriousness. We have asked them for documents and
proofs of investible funds,” said a source from the banking
industry.
DPG
representatives told SBI Capital Markets they could invest Rs 14,000
crore in the airline and sought details of the company’s assets,
liabilities and litigation. DPG website says Singh is a native of
Sultanpur (Uttar Pradesh), with a royal-cum-business background and
can speak Dutch, French and Russian language, along with other Indian
languages. Singh’s business interests span across various areas
like finance, farming and film production.
The
$104-billion Tata group on Wednesday announced that it was demerging
the consumer products business of Tata Chemicals into Tata Global
Beverages as part of a larger mandate to bring food and beverages
under one unit.
The
announcement brings to an end days of speculation and comes nearly
two months after Tata Sons Chairman N Chandrasekaran restructured
operations under 10 verticals at the conglomerate in a bid to
streamline its business.
Tata
Global will be renamed Tata Consumer Products after the demerger and
will see its turnover rise 25 per cent to Rs 9,099 crore with
earnings before interest, tax, depreciation and amortisation (Ebitda)
of Rs 1,154 crore. The market capitalisation of the new entity will
be Rs 18,000 crore at the current share price of Tata Global, said
analysts, which is an increase of nearly Rs 5,800 crore over its
Wednesday’s market capitalisation, which stood at Rs 12,500 crore.
Under
the demerger process, 114 shares of Tata Global will be issued for
every 100 shares of Tata Chemicals, taking the latter’s
post-demerger share base to 920 million from 631 million now.
Also,
Tata Chemicals will see its revenue (including inter-segment sales)
decline by 15 per cent to Rs 10,336 crore.
Apart
from Tata Salt and Tata Sampann, which is into spices, pulses and
snacks, the demerger will see the transfer of a little-known brand
called Tata Dx, a detergent powder, to Tata Global. Launched by Tata
Chemicals on a pilot basis in West Bengal in the March quarter, this
brand is likely to get an aggressive push from Tata Global in future
as it eyes a foray into home care. Top sources in the group say this
is one of the key legs of the consolidation drive in consumer, which
will unfold in the months ahead.
It
looks like Jet Airways Ltd.’s luck has finally run out. India’s
oldest privately owned airline is on the verge of shutting down all
its flights -- it already has perhaps fewer than 10 aircraft active
-- because it simply doesn’t have enough working capital. It’s
more than a billion dollars in debt and has lost money for the last
four quarters.
On
one level, you could argue that this is a good sign for India: Its
institutions are holding up. State-owned banks are Jet’s biggest
creditors and they seem unwilling to throw more money at the airline
without a clear revival plan. This is a big change from the past,
when they kept supporting one of Jet’s rivals, the ill-fated
Kingfisher Airlines Ltd., long after it seemed rational to do so.
News
also broke a few days ago that Jet’s founder, Naresh Goyal, was no
longer bidding for the banks’ stake in the airline, perhaps because
other shareholders wouldn’t play along. Too often India
cash-strapped companies have managed to get their debt restructured,
with state-owned banks taking a haircut while the “promoters” who
control crucial amounts of equity maintain control of the company.
That is an unhealthy lack of accountability and we should all be glad
it doesn’t seem to be happening in this case.
Jet
has 23,000 employees and a devoted fan base, yet isn’t an easy
company to love. I say its luck has run out because in the past it
consistently seemed to benefit from government intervention that
drove many of its full-service competitors out of the market. It’s
the only survivor from the first round of private Indian airlines
that started flying in the 1990s -- and, in many Indian sectors, that
usually means that you’ve managed the government much better than
your peers have.In the end, however, the market wins out. If you are
competing against low-cost airlines that still somehow provide
equivalent service in economy class -- not to mention a full-service
airline, Air India Ltd., that’s state-owned and can absorb whatever
losses it wants -- you can’t dodge fate forever...Read
More
Some
ex-Tata group executives have teamed up with a veteran investor to
seek to bring change at Indian companies, in a rare attempt to
influence management in a country where shareholder activism has
largely failed to take hold.
Former
Tata employees including Mukund Rajan and Govind Sankaranarayanan
have partnered with Ajit Dayal, the founder of mutual fund firm
Quantum Advisors, to set up a fund to invest in smaller stocks with a
view to working with managements to help them improve in areas such
as corporate governance.
The
team expects to get regulatory approval for the tentatively named
Active Engagement Fund by May and seeks to raise and invest $1
billion in the next three years, Sankaranarayan said in an interview
in Mumbai. The fund expects to begin investing from September.
Sankaranarayan,
who spent more than two decades at Tata Group, says the fund
deliberately shunned the activist moniker and positioned itself as an
environmental, social and governance vehicle because aggressive
activism just wouldn’t succeed in India. The reason, he says, is
that founding shareholders typically tend to own as much as 40
percent of companies. Instead, the fund will invest in smaller
companies where owners are more likely to be open to change, he said.
“Unlike
the U.S., activism is less likely to work in India as founders at
most companies are very influential because of the substantial stakes
they hold,” Sankaranarayan said. “We need to engage with the
founders in a persuasive, meaningful way to drive our ESG agenda.”
Corporate
India is grappling with a range of governance issues, everything from
business relationships with related parties to poor disclosures on
debt.
Joint
venture company Tata Starbucks, which runs the Seattle-based cafe
chain in India, is looking to cut losses and improve sales even as it
expands its footprint in the country. Speaking to Business Standard
in his first interaction since taking over as company chief executive
officer (CEO) in January, Navin Gurnaney said the focus for the firm
was on “unit economics” as it sought to widen operating profit.
“It is all about thoughtful aggression,” Gurnaney said. “Our
endeavour is to select our locations carefully where we can derive
maximum mileage and sales throughput. Starbucks is positioned as the
third place globally and that thinking guides us locally too,” he
said.
In 2017-18
financial year (FY18), Tata Starbucks had reported its first
operating profit at Rs 1.26 crore on a total revenue of Rs 345 crore.
But at the bottom line level, the company remained in the red,
reporting a net loss of Rs 30.5 crore (in FY18). While lower than the
previous year (net loss of Rs 32.3 crore in FY17), analysts expect
Tata Starbucks to break-even in the next few years as competitive
intensity from the likes of Cafe Coffee Day, McCafe (from McDonald’s)
and Barista apart from fast-food joints such as Domino’s, KFC and
Pizza Hut (all of whom serve beverages) remains high.
Cafe
Coffee Day, for the uninitiated, has over 1,700 stores, while McCafe
has over 180 stores and Barista has over 200 outlets in India. In
August last year, Coca-Cola globally acquired Costa Coffee in a
$5.1-billion transaction, with plans to rejuvenate the brand here.
Gurnaney
said the JV company would close FY19 with a total store count of 144
in eight cities, adding nearly 30 stores in the current financial
year. “We have steadily increased the number of stores we add per
year. In 2017-18, we added 25 stores. The year before that (2016-17),
we added 16 stores (per year) and before that (2015-16) we added 10
stores a year,” Gurnaney, who took over from Sumitro Ghosh, the
erstwhile Tata Starbucks CEO, said. Ghosh returned to the US after a
three-year stint with the JV company. He has picked up a role within
the Starbucks organisation, Tata Starbucks said when announcing his
exit in October.
Amid the crisis in the NBFC sector, Tata Capital, the financial services arm of the Tata Group, is looking at a growth of 25-30 per cent per year in its loan book in the next financial year (FY20) and beyond.
With
the loan book value of the company at Rs 70,000 crore, a 25-30 per
cent growth could take it up to Rs 1 trillion in 2020. At present, it
has three lending arms — Tata Capital Financial Services, Tata
Capital Housing Finance and Tata Cleantech — a joint venture with
International Finance Corporation.
Rajiv
Sabharwal, managing director and chief executive of Tata Capital,
said, “We want to grow at 25-30 per cent and also ensure that our
portfolio quality and return to investors remains good.”...Read
More
