Starfish Growth Partners, Investpad partner to create $100 million Idea Stage Innovation Fund

US Dollars

Investpad and Starfish Growth Partners (SGPL), an idea-stage capital, incubation and accelerator advisory firm have announced a strategic partnership to fuel the next phase of idea-stage innovation in India.

With a commitment of $100 million+ over the next three years, this partnership claims it will give rise to an ecosystem spanning capital and fundraise advisory, business incubation and growth acceleration services.

The partnership has a double operating base of the US and Hyderabad, India, which gives them a unique vantage point to understand the lack of proper support that idea-stage founders need in developing markets like India, believes Philip Thomas, founding partner and CEO, SGPL.

“While India has seen major advancements in home-grown businesses making a mark on the global stage, we still are at a nascent stage when it comes to accelerating the right culture of innovation. A lot of bright founders with truly game-changing ideas are led to throw in the towel early,” Thomas said.

“This is not just due to the lack of capital but also the right support system that will help them navigate everyday challenges. We believe in evaluating every idea on the same baseline – potential to make real world impact at scale, technology immersion and addressing clear market gaps. Starfish along with Investpad will aim to channelising the capital resources we bring in towards fuelling many moon-shot innovations in the near future,” Thomas added.

While the innovation fund seeks to remain industry agnostic, there will be a special focus on verticals such as education, manufacturing, deep-tech, agriculture, fin-tech, healthcare and sustainability.

The fund aims to enhance its portfolio to around 30-35 start-ups over the next 13 months. Ticket size purely depends on the nature and need of the idea/business and will range from Rs 25 lakh to $10 million.

Sai Abhishek Rayarao, CEO, Investpad, commented, “With Starfish our track record of investments and helping ideas impact everyday lives of consumers has been very satisfying. We have worked with some of the most passionate and driven individuals who hustle to change the world for the better. I am sure this team will be able to attract more moon-shots and help them achieve escape velocity.”

“I have witnessed the power of the ecosystem in the US first-hand, and it is no surprise that the majority of tools we use in our everyday life stems from those communities. We want to build something that allows our entrepreneurs to thrive. Despite start-ups being a buzzword for many years in India, founders have to rely on funds from family and friends to begin with. We want to bring a seismic shift in the confidence level of deserving founders to bring their ideas to life,” Rayarao said.

Investpad claims it is disrupting the start-up ecosystem with its primary focus on idea-stage and early-stage investments that currently bridges the gap between US and Indian markets.

Established in 2016 idea-stage entrepreneurship incubator and capital advisor, Starfish Growth Partners has incubated more than 25 disruptive start-ups, raised over Rs 125+ crore in capital and has already helped more than 50 percent of their portfolio companies become profitable.

The strategic partnership between Invest Pad and Starfish Growth Partners further acts as a catalyst in helping achieve their combined goal of improving the success ratio of idea-stage companies, especially in India.

With this aligned mission and vision, together they are hoping to take multiple technology native, billion-user ideas to the next level.

Mahanadi Coal Railway scouts for CEO to rollout Rs 1,700 crore project

FILE PHOTO: Workers walk on a heap of coal at a stockyard of an underground coal mine in the Mahanadi coal fields at Dera, near Talcher town in Orissa March 28, 2012. REUTERS/Rupak De Chowdhuri/File Photo

Mahanadi Coal Railway Ltd, a joint venture of MCL, IRCON and IDCO, is scouting for a chief executive officer to implement coal evacuation infrastructure projects in Odisha, officials said.

Initially, one corridor has been identified for implementation of the project, the estimated cost of which is Rs 1,7OO crore. This project will help in creating railway evacuation infrastructure for Talcher mines.

Talcher Coalfield feeds coal to power stations in 10 states, including Odisha.

Other projects will be identified for implementation later, the official said. Coal India subsidiary Mahanadi Coalfields Ltd (MCL) holds 64 percent, IRCON International Limited has 26 percent and Odisha Industrial Infrastructure Development Corporation or IDCO holds 10 percent stake in the JVC, for financing, development and operation of identified railway projects important for coal evacuation and connectivity in Odisha.

Coal India has aimed over Rs 30,000 crore investment in coal evacuation infrastructure by 2024. It had recently announced Rs 3,370 crore capex in constructing railway sidings across its four subsidiaries.

Meanwhile, production and despatch in Talcher coalfields was paralysed on Monday due to the economic blockade staged by a local outfit demanding fulfilment of five-point charter of demands.

The demands included functioning of Talcher medical college from the current academic session, setting up of a new thermal power plant in place of the old TTPS, railway link between Talcher and Angul, extension of Puri-Talcher train up to Kaniha and mandatory tarpaulin cover on trucks engaged in transportation.

The blockade was called off on Monday evening after Angul Collector S S Swain held discussions with the protestors. The official said, the economic blockade led to complete stoppage of coal supply to power plants of NALCO and NTPC.

India seen growing by 11.5% in FY22; global outlook improves, says IMF in latest World Economic Outlook report

Gita Gopinath, Gita Gopinath IMF

The race between COVID-19 and the vaccine, and the ability of policies to provide effective support until the recovery is firmly underway, will determine the path of global activity, the International Monetary Fund (IMF) said on Tuesday.

In its latest World Economic Outlook update for January, the IMF forecast global growth for 2021 at 5.5 percent, 0.3 percentage points higher than its October forecast. It then expects global growth to moderate to 4.2 percent in 2022.

“The upgrade for 2021 reflects the positive effects of the onset of vaccinations in some countries, additional policy support at the end of 2020 in economies such as the United States and Japan and an expected increase in contact intensive activities as the health crisis wanes,” IMF said.

The positive effects, its report said, may be partially offset by a somewhat worse outlook for the very near term as measures to contain the spread of the virus dampen activity.

The projected growth recovery this year follows a severe collapse in 2020, which IMF estimates at -3.5 percent, 0.9 percentage point higher than projected in the October forecast, reflecting stronger-than-expected momentum in the second half of 2020, the report added.

In the upside scenario, the level of global output increases above baseline by roughly 0.75 percent in 2021, widening to almost 1 percent above baseline in 2022, IMF said. In the downside scenario, the report said, global activity falls below baseline by roughly 0.75 percent in 2021 but starts to return toward baseline in 2022.

“There is a great deal of uncertainty around this forecast. Greater success with vaccinations and therapeutics and additional policy support could improve outcomes, while slow vaccine rollout, virus mutations, and premature withdrawal of policy support can worsen outcomes. If downside risks were to materialize, a tightening of financial conditions could amplify the downturn at a time when public and corporate debt are at record highs worldwide,” IMF’s Chief Economist Gita Gopinath said.

“The strength of the projected recovery also varies significantly across countries, with large differences in projected output losses relative to the pre-COVID forecast,” Gopinath added.

India’s growth forecast for FY22 was revised significantly in IMF’s latest World Economic Outlook report. India’s economy is now seen growing by 11.5 percent in FY22, 270 bps higher than the October forecast, and by 6.8 percent in FY23, lower by 120 basis points compared to the October forecast. The upward revision in India’s FY22 forecast reflects carryover from a stronger-than-expected recovery in FY21, IMF said.

Data privacy can take form of non-price competition: CCI study

Tips to Protect Your Data and Privacy Online

Data privacy can take the form of non-price competition and abuse of dominance can lower privacy protection, a study conducted by the Competition Commission of India (CCI) has said.

The study also made observations about other non-price factors such as quality of service (QoS), data speeds and bundled offerings, which are likely to be the new drivers of competitive rivalry between service providers in telecom sector in addition to just price.

While reporting the findings and making its own observations, CCI noted that an aspect of data in the context of competition in digital communications market is the conflict between allowing access and protecting consumer privacy.

“Privacy can take the form of non-price competition,” it said.

Abuse of dominance can take the form of lowering the privacy protection and therefore fall within the ambit of antitrust as low privacy standard implies lack of consumer welfare.

Privacy degradation can lead to an objective detriment to consumers. Lower data protection can also lead to the standard legal category of exclusionary behaviour which undermines the competitive process, CCI noted in the report.

“Tying with other digital products will further strengthen the data advantage enjoyed by the dominant incumbent by cross-linking the data collected across services, creating a vicious circle,” it said.

On other non-price factors of competition, CCI found that consumers ranked network coverage at the top followed by customer service, tariff packaging and lower tariffs as the most important factors for the preference of a particular network. These responses suggest that competition has moved away from a unidimensional focus on price, as per the report.

“Much of the focus of the sector regulator, operators and consumers was on price and price-based competition. With the market moving towards data-based applications and services, there is a noticeable change in the demand for QoS,” the report said.

Tariffs have been the centre-piece of competition in the price-sensitive Indian market. Episodes of intense price wars have been witnessed and there might be a recognition now that the intense recent tariff war that began in 2016 has eroded the sector of its financial stability.

Almost all stakeholders agreed that remaining the cheapest telecom market in the world would be an untenable option for the sector going forward, it further said.

The report supports findings that demonstrate an important role for non-price factors in driving competition in the Indian telecom market, partly reflecting the maturing nature of competition and in part the recognition that price competition has its intrinsic limits.

Even though the average consumer remains price sensitive, other factors such as QoS, data speeds and bundled offerings are shown to influence consumer choice.

The report envisages that a pan-India mobile network and data packages are no longer the product or service differentiators, rather bundled offerings (which include, inter alia, voice, data, SMS, and content) will be the focus of differentiation among service providers with service bouquets to be the likely choice for improving customer retention.

The dynamic nature of telecom market ensures that what is a differentiator at one point in time becomes common at another.

The regulator had launched a market study on the telecom sector in India in January 2020 whose objective was to assess the level of concentration and competition in the telecom sector, highlight changes in competition strategies, analyse the dynamics of competition and cooperation between telecom services and related industries such as OTT services, tower companies and infrastructure providers, examine regulations and policy developments from a competition standpoint.

Govt may announce steps in Budget 2021 to promote e-commerce exports, imports

Nirmala Sitharaman, COVID19, coronavirus

The government in the budget next week is expected to announce measures such as extending the facility of bulk clearance for e-commerce imports and exports with a view to promoting the growth of this fast-growing segment in the country, sources said.

They said that as there is a multi-fold increase in the e-commerce sector in the country, a significant volume of products is imported into and exported out of India through this platform and there is a need to find a balance between control and facilitation for the sector.

Currently, importers and exporters are required to submit individual/separate clearance documents for each package with the Indian customs department, which adds cost for traders to conduct business through e-commerce.

“With an aim to support the growth of the e-commerce sector in India, the facility for bulk clearance of import and export is required for e-commerce import and exports. Additionally, a simplified process in case of return of e-commerce shipments would also help in promoting the growth,” one of the sources said.

Finance minister Nirmala Sitharaman will unveil the Budget for 2021-22 on February 1. According to exporters, easing of processes for the sector would further help in boosting the country’s outbound shipments.

“Extending the facility of bulk clearance is a good idea. Globally this facility is there. It will help in reducing transaction cost. if it is permitted, it would hugely benefit the e-commerce trade,” Federation of Indian Export Organisation’s Director General Ajay Sahai said. A leather exporter said the move if announced in the Budget would help promote exports through e-commerce medium.

Govt orders temporary internet shutdown in parts of Delhi as farmers’ protest turns violent

The government Tuesday ordered suspension of internet services in parts of Delhi-NCR as a tractor parade by protesting farmers turned violent at several locations in the national capital, officials said.

The internet shutdown will be effective till midnight Tuesday in Delhi’s Singhu, Ghazipur, Tikri, Mukarba Chowk, Nangloi and their adjoining areas. An order issued by the Ministry of Home Affairs said the decision has been taken in exercise of the powers conferred by section 7 of the Indian Telegraph Act 1855. It said the suspension of internet services was necessary and expedient in the interest of maintaining public safety and averting public emergency.

The order will be in force in from 12:00 hours to 23:59 hours on January 26, the MHA said. People residing close to farmers protest sites said they are getting SMSes informing them about the suspension of internet services in their area.

“As per the government instructions, the Internet services have been temporarily stopped in your area because of which you are not able to use these services. You will be able to use the Internet services once we get directions from the government,” an SMS sent by a telecom operator read.

Meanwhile, an MHA source said Rapid Action Force personnel have been repositioned in the national capital and vigil has been intensified in view of the evolving situation.

Wielding sticks and clubs and holding the tricolour and union flags, tens of thousands of farmers atop tractors broke barriers, clashed with police and entered the city from various points to lay siege to the Red Fort and climb the flagpole on Republic Day on Tuesday.

While farmer leaders, who have been spearheading the two-month protest at the national capital’s border points to demand a repeal of the farm laws, disowned the protesters, one young man was seen hoisting a yellow triangular flag at the flagpole – the centrepiece of the country’s Independence Day celebrations. The protesters were later removed from the premises of the Red Fort.

Farmers protest: Entry, exit gates of 20 Delhi metro stations temporarily closed

The entry and exit gates of at least 20 metro stations were closed as chaos escalated due to the farmers’ protest turning violent on Tuesday. Railway trains were also stopped as a precautionary measure for over two hours at the Tilak Bridge railway station after the protestors reached ITO in Central Delhi and clashed with police.

The Delhi Metro Rail Corporation took to Twitter to inform the public about the temporary closure of metro station gates. “Entry and exit gates of Jama Masjid, Dilshad Garden, Jhilmil and Mansarovar Park metro stations are closed,” the Delhi Metro Rail Corporation (DMRC) said on twitter. Entry and exit gates of all stations on the grey line were also closed besides the Delhi Gate and ITO metro stations.

Earlier in the day, the DMRC announced temporary closure of the entry and exit gates of more than 10 metro stations in central and north Delhi following clashes between police and protesting farmers at a number of places in the national capital. “Entry/exit gates of Indraprastha metro station are closed. Entry/exit gates of Samaypur Badli, Rohini Sector 18/19, Haiderpur Badli Mor, Jahangir Puri, Adarsh Nagar, Azadpur, Model Town, GTB Nagar, Vishwavidyalaya, Vidhan Sabha and Civil Lines are closed,” the DMRC had tweeted.

The Delhi Police had given permission to farmers protesting the three new farm laws to hold their tractor parade on selected routes only after the official Republic Day parade on the Rajpath concludes. However, chaos ensued as the farmers were adamant of heading towards central Delhi way ahead of the designated time. According to a senior railway official, “trains were stopped for 2 hours between 12.30 to 14.30 hours as a precautionary measure at Tilak bridge station”.

Delhi-NCR has maximum stuck housing units at 1.9 lakh worth nearly Rs 1.2 lakh cr: Report

Real estate growth

Delhi-NCR property market has maximum stuck housing units at 1.9 lakh, worth nearly Rs 1.2 lakh crore, that were delayed by at least seven years, according to property consultant Anarock. A total of 1,90,120 housing units, worth Rs 1,19,291 crore, were stuck in the Delhi-NCR as of 2020-end. These flats were launched in 2013 and before.

The property market of Mumbai Metropolitan Region (MMR) has the second highest number of stuck housing units at 1,80,250, worth Rs 2,02,145 crore. Across seven major cities, as many as 5,02,340 housing units, worth Rs 4,07,005 crore, were stuck at the end of last year.

As on 2019-end, 1,322 projects comprising 5.76 lakh units were stuck in various stages. Commenting on the report, Anarock Chairman Anuj Puri said: “Project delays have been the bane of the Indian real estate sector over the last decade. Even the implementation of RERA had only a little impact on this”.

Among other factors, the liquidity crunch threw up roadblocks for developers, which is why the government intervened with the creation of the Alternate Investment Fund (AIF) in late 2019 with a corpus of Rs 25,000 crore, he said. “This last-mile capitalization mechanism couched in the Special Window for Affordable & Mid-Income Housing (SWAMIH) fund has proved to be effective in getting stuck projects going again,” Puri said.

As many as190 stuck/delayed housing projects accounting for over 73,560 units were completed in 2020, Anarock said. As per the data, 29,850 housing units worth Rs 22,276 crore were stuck in Bengaluru.

Pune has 80,480 units worth Rs 49,667 crore that were delayed as of 2020-end. As many as 9,180 housing units worth Rs 5,436 crore were delayed in Kolkata.

Hyderabad has 6,520 stuck housing units worth Rs 4,305 crore, while Chennai has 5,940 units worth Rs 3,886 crore.

GAIL plans to launch pipeline InvIT before spliting pipeline business

State-owned gas utility GAIL (India) Ltd plans to launch an InvIT of its two gas pipelines between Dahej and Bengaluru ahead of a proposed splitting of the pipeline business from the gas marketing function, sources said.

The nation’s top gas marketing and transportation firm plans to monetise Dahej-Uran-Panvel-Dabhol pipeline and Dabhol-Bengaluru pipeline by setting up an Infrastructure Investment Trust (InvIT), two sources with direct knowledge of the matter said.

InvITs are like a mutual fund, which enables direct investment of small amounts of money from possible individual / institutional investors in infrastructure to earn a small portion of the income as return. GAIL will retain majority stake in the pipelines that run from Dahej in Gujarat to Dabhol in Maharashtra and from there to Bengaluru in Karnataka.

The InvIT may involve selling 10-20 per cent stake initially, the sources said. GAIL owns and operates a natural gas pipeline network that spans 12,502 kilometers, mostly in the western, southern and northern part of the country. It is building more pipelines in eastern part of the country.

The sources said InvITs are new infrastructure financing model and GAIL is keen to use them. The two pipelines proposed for InvIT had incurred over Rs 3,000 crore spending.

The move comes ahead of a planned spin-off of GAIL’s pipeline business into a 100 per cent subsidiary. GAIL is India’s biggest natural gas marketing and trading firm and owns more than 70 per cent of the country’s 16,981-km pipeline network, giving it a stranglehold on the market.

Users of natural gas have often complained about not “fairly” getting access to GAIL’s 12,160-km pipeline network to transport their fuel. Sources said to resolve the conflict arising out of the same entity owning two jobs, bifurcating GAIL is being considered.

GAIL’s core business after the bifurcation would be marketing of natural gas and petrochemical production. It will have to hire capacity on pipelines from the subsidiary and pay the regulator approved traffics for the same. Sources said a note for the split will be moved for the consideration of the Cabinet soon.

The proposal involves separating the accounts of the pipeline division as well as transferring employees directly connected with the pipeline operations to the new subsidiary, they said adding a suitable name for the subsidiary is being mulled over. GAIL already keeps separate accounts for its gas pipeline and marketing businesses, making it easier to split them into two entities.

and opening the sector, the government hopes to increase gas use to 15 per cent of the energy mix by 2030, from current 6.2 per cent. The government has a 54.89 per cent stake in GAIL India.

ICICI Securities upgrades Kotak Mahindra Bank stock ratings from ‘HOLD’ to ‘ADD’

Kotak Mahindra Bank

ICICI Securities on Tuesday upgraded its ratings on Kotak Mahindra Bank from ‘HOLD’ to ‘ADD’.

The brokerage said the bank’s Q3FY21 earnings were characterised by rising comfort towards lending to better-rated large corporates (up 7% QoQ), MSMEs under sovereign guaranteed ECLGS schemes (Rs97bn till date), and secured retail portfolio (up 5% QoQ).

The bank has disbursed Rs 97 billion till date under (>5% market share of system ECLGS disbursements against its credit market share of 2%) which it disbursed to 50-60 percent of ex-corporate/mortgage portfolio as eligible pool.

According to the brokerage, no excess leveraging was reflected in the YoY growth – many customers who took Emergency Credit Line Guarantee Scheme (ECLGS) benefit have lowered their utilisation of other limits.

“On anticipated lines, proforma GNPAs rose to 3.27% (from 2.7% in Q2FY21), SMA-2 settled at 0.3%, approved restructuring was much lower at 0.28% (suggesting sub-4% stress pool) and well covered with provisioning build-up of 2.9%.”

However, unsecured retail and commercial vehicle (bus operator segment) portfolios are reflecting disproportionate stress.

“Credit cost for Q3FY21 and 9MFY21 at 115bps suggests our FY21E estimate of 160bps (ask-rate of >300bps) is too conservative, hence we revise it to 1.3%/1.2% for FY21E/FY22E, thereby leading to earnings upgrade of 7%/3%, respectively.”

ICICI Securities pointed out that overhead costs failed to cheer due to rising spends towards a few growth initiatives.

On subsidiaries, auto financing and investment banking gained earnings traction while international subsidiaries saw a dip.

The stock has corrected 9 percent since its downgrade to HOLD and now the brokerage has upgrade it to ADD with the target price unchanged at Rs 2,023.