Author: Mugdha Variyar

Delhivery IPO: Softbank, Carlyle Group to cash out, co says losses to continue

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Logistics startup Delhivery has filed its prospectus for a Rs 7,460 crore initial public offer (IPO), in which it looks to raise Rs 5,000 crore through fresh issue of shares and Rs 2,460 crore through an offer for sale (OFS).

Selling shareholders

The selling shareholders in the OFS include China Momentum Fund (Deli CMF) – Rs 400 crore; Carlyle Group (CA Swift) – Rs 920 crore; Softbank Vision Fund (SVF Doorbell) – Rs 750 crore; Times Internet – Rs 330 crore.

Objectives of issue

The company has listed two main objects of the offer in the prospectus, which include funding organic growth initiatives (Rs 2500 crore) and funding inorganic growth through acquisitions and other strategic initiatives (Rs 1250 crore).

Also Read | Exclusive: Delhivery files papers for IPO worth Rs 7,000 crore

Financials

The company has seen its losses shoot up by over 50  percent in Fy21 to Rs 415 crore, even while total income increased by 28 percent to Rs 3838 crore.

The company said about 40 percent of its revenues in FY21, which is about Rs 1556 crore, came from the top five customers. The company said the majority of its revenue comes from the e-commerce sector.

Losses to continue

Much like several other internet companies that are hitting the public markets, Delhivery, too, has said it will continue to see losses in the near future.

“We have a history of losses and negative cash flows from operating, investing and financing activities and we may continue to experience losses and negative cash flows in the future as we anticipate increased expenses in the future,” the company said in the prospectus.

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Oyo writes to Sebi refuting Zostel’s allegations on IPO

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Hospitality firm Oyo has sent a letter to market regulator Sebi refuting allegations by Zostel, sources told CNBC-TV18. Zostel had written a letter to Sebi on October 11 claiming that Oyo’s IPO is “non-maintainable” as Oyo’s “capital structure is not final”.

The company has accused Zostel of trying to adversely impact its IPO, and added that the term sheet with Zostel was “mutually terminated” due to “non-completion of the due diligence process and transaction structuring raised by Zostel.”

Oyo also added that there was no restriction imposed on changing shareholding pattern by the Award or by Delhi High Court Further, and said that no stay has been granted by Delhi High Court on the proposed IPO. Zostel is still to respond to CNBC-TV18‘s queries.

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Zostel had claimed that Oyo’s DRHP is “illegal” since it is in contravention of Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018″

Reg 5(2) of SEBI ICDR regulations prohibits an IPO if any entity/person has rights that entitle them to receive shares of the issuer. Zostel claims it is due to 7 percent shares in Oyo based on a term sheet between the two parties that was held as ‘binding’ by an arbitral tribunal in March this year. Oyo, however, has maintained that the arbitral award has not issued Zostel or any of its shareholders any shares in Oyo.

In the letter to Sebi, Zostel had said that “the IPO is non-maintainable as Oravel’s capital structure is not final”, and that the “DRHP is replete with material omissions and blatant misstatements, intended to mislead the public into investing into Oravel’s shares without an appreciation of the risks involved.”

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Zostel had earlier taken the matter to the Delhi High Court, which has adjourned the case to October 21. Zostel had moved the Delhi High Court late last month seeking to restrain Oyo from ‘altering its shareholding pattern, including through an IPO’ since it claims that an arbitral award it won in March this year grants Zostel’s shareholders 7 percent shares of Oyo.

Oyo on October 1 filed its draft red herring prospectus (DRHP) with Sebi for raising Rs 8,430 crore through an IPO. In the DRHP, Oyo said “an adverse outcome in legal proceedings involving Zostel may materially and adversely affect our business, reputation, prospects, results of operation and financial condition,” and has gone on to say that the “arbitrator did not pass any directions for issuance of shares of the Company to the Claimants (Zostel).”

Oyo, in a blog post on September 28, had accused Zostel of “forum hunting”.

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“Without considering the grounds of challenge by OYO of the Award, the Award in itself has not issued Zostel or any of its shareholders any shares in OYO. The only relief, apart from costs, which has been granted to Zostel, is to initiate “appropriate proceedings” to execute Definitive Agreements and seek specific performance of the Term Sheet. As such, till the time that parties do not come to an agreement on the terms of the Definitive Agreements and the same are not executed, no right whatsoever arises in favour of any party for any type of shares to be issued in OYO,” the company said in the blog post.

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Beauty platform Purplle raises $75 million

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Purplle.com, an online beauty destination, has announced a $75 million funding and will add investor Kedaara to the cap table. This comes six months after a $45 million funding backed by Verlinvest, Blume Ventures, JSW Ventures, and first-time investor Sequoia Capital India.

Purplle says it is on a robust growth trajectory, having grown its GMV (Gross merchandise volume) by 6x in the last three years. Even with a COVID year, the company said it delivered 90 percent GMV CAGR for the last three years.

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Speaking on the investment, Manish Taneja, co-founder and CEO, Purplle.com, and Suyash Katyayani, co-founder and CTO of, Purplle.com said, “We are excited to partner with Kedaara, as they venture into the beauty e-commerce industry. Being one of the marquee investors in India, Kedaara’s rich experience across consumer and tech will empower us in our next phase of growth. With this investment, we will strengthen our technology capabilities, deepen our talent pool, introduce new and innovative products and brands, invest in entrepreneurs building differentiated beauty offerings, and create a treasure chest for potential acquisitions.”

Sunish Sharma, co-CEO and managing partner at Kedaara, and Anant Gupta, managing director at Kedaara added, “We are delighted to partner with Purplle. Led by an innovative, passionate and strong execution-focused team, the company has demonstrated market-leading growth and continues to build a unique platform focused on the ethos of democratizing Beauty and Personal Care across India. We believe Purplle offers a unique value proposition and a superior customer experience and will continue to have strong tailwinds for a long time. We are very excited with our new investment in the consumer-tech space and look forward to working closely with the Purplle team in helping them realize their vision.”

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Founded in 2012, Purplle.com says it now has 7 million monthly active users. The beauty e-tailer has over 1000+ brands with nearly 50,000 products, available on its website and app. The company investors include Kedaara, Sequoia Capital India, Goldman Sachs, Verlinvest, Blume Ventures, and JSW Ventures.

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Apple doubled business in India over past year, says CEO Tim Cook

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apple has doubled its business in India over the past year, CEO Tim Cook said during the company’s Q4 earnings call on Thursday.

Cook said Apple set quarterly records in every geographic segment with strong double-digit growth across the board. “During fiscal 2021, we earned nearly one-third of our revenue from emerging markets and doubled our business in India and Vietnam, he said.

It must be noted Apple‘s fiscal year starts at the end of September.

While Apple does not disclose its numbers in India, market research firm Counterpoint Research said the September quarter was Apple’s best quarter in the country with a record two million shipments. Apple also became the top 5G smartphone brand in the premium segment for the first time, according to the research firm.

“Apple had a very successful quarter in terms of iPhones with shipments crossing a record 2 million units for the first time in a single quarter. iPhone 11 and 12 contributed almost 62% of that. The recent quarter was the best for Apple in India ever,” said Tarun Pathak, research director at Counterpoint Research.

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He added that the full impact of the festive season will reflect in the next quarter and his firm is of the view that iPhone 12 is likely to lead within portfolio. Apple had the strongest lineup in India in the past year that contributed to the growth, he said, adding that the pandemic-induced trends worked in favor of iPad, Mac, Airpod, and services growth as well in India. “The strong product demand along with a dedicated channel strategy helped Apple to grow in India,” Pathak said.

According to Counterpoint Research, Apple was the fastest growing brand in Q3 2021 with 212 percent year-on-year (YoY) growth and led the premium smartphone market (> Rs 30,000) with a 44 percent share. The brand maintained its leading position in the ultra-premium segment (> Rs 45,000 or $650) with a 74 percent share. Strong demand for the iPhone 12 and iPhone 11 were the major factors in Apple’s growth, the research firm added.

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Flipkart and Moj announce a collaboration for video and live commerce

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Walmart owned e-commerce major Flipkart and short video platform Moj announced a collaboration to enable video and live commerce. Through an in-app integration, Moj users will be able to discover and shop from Flipkart directly.

Users will get a content and commerce experience on Moj wherein they can buy tagged Flipkart marketplace products directly from the video screen.

Flipkart said this will help the company scale video commerce in the country and engage the next 200 million e-commerce customers. Moj has a monthly active user base of over 160 million members, making it one of the largest among all Indian short-form video platforms.

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The companies said the collaboration also incentivises content creators in the Moj ecosystem by enabling new commerce-led revenue streams.

A recent report published by RedSeer Consulting predicts that the gross merchandise value of live commerce through short videos would touch $5 billion in India by 2025.

Speaking about the collaboration with Moj, Ravi Iyer, senior vice president and head, corporate development, Flipkart, said, “The rise of short-form video as a preferred content format across India today has created the right opportunity for us to pursue video and live commerce at scale. The strategic collaboration between Flipkart and Moj will play a key role in onboarding the next 200 million e-commerce users while creating an ecosystem that benefits all stakeholders involved – from brands and sellers to content creators.”

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“Given the diverse cultural fabric of our country and with the intention to offer an inclusive e-commerce experience to every consumer, we continue to bridge the gap between audiences through our regional language interface experience which has played a key role in onboarding first-time consumers. Moj’s wide reach through the Indic languages it operates in is another step in this direction. Today, we are at the threshold of creating a brand new e-commerce experience driven by the best technology and we believe this is going to be well-received by people across the country,” Iyer said.

Manohar Singh Charan, chief financial officer, Mohalla Tech Pvt Ltd, the parent company of Moj said, “With the explosive growth our app has had since our launch, Moj has become home to the zeitgeist of the Indian youth. At Moj, creators are at the heart of everything we do and one of our key efforts is to help create stable long-term opportunities that help our creator community monetize their amazing content.”

“The creator economy led revenue streams are globally seeing a massive upsurge and this collaboration with Flipkart is a step towards developing a concrete revenue stream for creators in India, while also enhancing the social experience of our users on the platform. This also opens the universe for creative in-app integrations towards personalised marketing. The seamless amalgamation of content and commerce will push brands to reimagine how they connect with their consumers and ignite the digital social commerce revolution in India,” Charan said.

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Paytm IPO likely to open on November 8, looks at $20 bn valuation

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Digital payments and financial services firm Paytm is likely to launch its initial public offering (IPO) on November 8 and is targeting a price band of Rs 2080-Rs 2150, as per sources.

The company is looking at a valuation of $20 billion.

Paytm is set to raise its IPO issue size to Rs 18,300 crore from the earlier Rs 16,600 crore to meet increased investor demand, sources told CNBC-TV18.

As a result, the new total IPO size will include primary size of Rs 8,300 crore (unchanged) and secondary of Rs 10,000 crore.

Paytm has recently received markets regulator Sebi’s approval to launch an initial public offering. This will be the biggest IPO in India to date in terms of size.

Roughly half of the offer for sale is going to be by Ant Financial, which holds close to 30 percent stake in the company and has to bring it under 25 percent to comply with SEBI’s rules for professionally managed companies. The remaining OFS will see participation by Alibaba, Elevation Capital, Softbank and other existing shareholders, sources said.

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Aditya Birla Fashion faces contempt of court allegations over patent infringement

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Yashram Lifestyle, a retailer focusing on products and services for women, has filed a contempt plea in Karnataka High Court against Aditya Birla Fashion and Retail Limited (ABFRL) for “disobeying” the court’s order regarding its patented products.

On September 25, the Karnataka HC had granted an absolute injunction restraining ABFRL from manufacturing or selling sanitary undergarments patented by Yashram Lifestyle Brands since 2009.

However, Yashram Lifestyle claims that ABFRL has been “wilfully disobeying” the absolute injunction and alleges that the company has continued to manufacture, market and sell the infringing products on its e-commerce website and on various other channels.

In its plea, Yashram Lifestyle has sought attachment of the assets of ABFRL along with “detention of all the personnel who are involved in the day-to-day affairs of the company in civil prison for willful disobedience and breach of the order”.

Deepa Kumar, managing director of Yashram Lifestyle Brands, said, “It’s been disappointing to witness such blatant disregard for the law. I have to fight for my statutory right granted by the Indian government. It’s not an easy battle, but it must be fought. It is unfortunate that I had no choice but to initiate contempt action against a business house that I have always admired.”

A spokesperson for ABFRL told CNBC-TV in a statement, “We are filing an appeal in the court shortly. However, in the meanwhile we have instructed our business to follow the court order.”

The hearing is scheduled for October 29, according to Yashram Lifestyle.

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Myntra CEO Amar Nagaram to move on

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Fashion portal Myntra’s chief executive officer (CEO) Amar Nagaram is set to move on from the company, as per sources. Company sources confirmed the development to CNBC-TV18. Nagaram will remain at the company till December and may continue with the company in an advisory role, a source said.

Nagaram took over the reins of Walmart-owned Myntra from former CEO Ananth Narayan in 2019.

Flipkart Group CEO Kalyan Krishnamurthy told employees in e-mail communication on Friday that Nagaram was leaving to ‘pursue his own venture.

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“After nearly three years of leading Myntra, Amar has decided to leave the Flipkart Group to pursue his own venture. As many of you know, Amar has been an integral part of the Group for close to 10 years and has led various teams at Flipkart prior to his current role, and we will miss his presence in the team,” Krishnamurthy wrote.

“Amar will be with us till end-December to ensure a smooth transition and will continue to be associated with us in an advisory role. We will share details of his successor shortly,” he added.

Myntra is one of the biggest fashion e-tailers in the country, and has partnered with over 5000+ leading fashion and lifestyle brands in the country such as Nike, Adidas, Puma, Levis, Wrangler, Arrow, Jealous 21, Diesel, CAT, Harley Davidson, Ferrari, Timberland, US Polo, FabIndia, Biba.

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Myntra services over 27,000 pin codes across the country.

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BigBasket, 1MG employees get access to Tata Digital’s new super app 

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As the Tata Group begins the rollout of Tata DIgital’s new super app TataNeu among employees, the app is now also accessible to employees of BigBasket and 1MG, companies that were acquired by the group earlier this year, sources aware of the development said.

The app is being rolled out to employees from earlier this month and Tata Group plans to roll it out to all five lakh employees in India in the next 2-3 weeks, as per people in the know.

The Tata Group has over 7 lakh employees globally, of which 5 lakh are based in India. BigBasket has close to 5000 employees, while the number of employees at 1MG is not clear.

The companies did not comment.

TataNeu has onboarded BigBasket, 1MG, Curefit, Croma, Taj Hotels, and is also in the process of onboarding other Tata Group brands onto the platform, as per a source.

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“This is a soft launch of the TataNeu super app to test it among employees first,” a source said.

Reports suggest that the official launch of the super app has been delayed due to the impending e-commerce rules, the draft of which had proposed that e-commerce platforms cannot sell their own group brands and labels on the platform.

Tata Digital has been on an acquisition spree to boost its super app, having paid over $1 billion to acquire a majority stake in both BigBasket and 1MG. Tata DIgital also invested in Curefit for a minority stake and brought on Curefit cofounder Mukesh Bansal as president.

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Ola likely to foray into grocery delivery soon

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ride-hailing app Ola is likely to enter the competitive grocery delivery and hyperlocal segment soon, sources aware of the matter told CNBC-TV18 on Tuesday.

This, however, is not the first time the firm will attempt to venture into the category. Earlier in 2015, Ola had launched its grocery delivery business called Ola Store as a separate app in several cities, starting from Bengaluru.

However, the segment did not take off then mainly due to poor demand and increasing costs, sources said.

Ola has not commented on the development yet.

Vinay Bhopatkar, who joined the firm in August this year, is heading Ola’s delivery business. He has earlier been associated with Cafe Coffee Day, Aditya Birla Fashion, and Asian Paints.

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On Tuesday, Bhopatkar was also made in-charge of Ola’s driver and supply ecosystem, according to an internal company communication seen by CNBC-TV18. The riding-hailing company’s CEO Bhavish Agarwal, in the internal letter, cited synergies between the two verticals and improvement in driver utilisation.

Agarwal recently said that Ola has seen a recovery in the ride-hailing business to pre-COVID-19 levels.

The company has been entering new verticals as it recently launched Ola Cars as a marketplace for new and used cars. The Bengaluru-based firm is also looking at scaling the reach of the platform Ola Cars to 100 cities by the next year.

Ola Cars offers a bouquet of services to customers, beginning with purchase, vehicle finance, and insurance, registration, maintenance, including vehicle health diagnostics and service, accessories, and also resale of the vehicle back to Ola Cars, according to the company’s statement.

Ola’s core ride-hailing unit is also planning to list on stock exchanges soon, for which it raised $500 million from Warburg Pincus and Temasek, giving early backers Tiger and Matrix a part exit from their stake in the company. While the company has hired bankers for its IPO, it hasn’t disclosed by when it plans to go public.

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