In his address at the Vibrant Gujrat Global Summit, Asia’s richest man, Mukesh Ambani announced plans to roll out his ecommerce venture to take on the might of Amazon and Flipkart. “Jio and Reliance Retail will launch a unique new commerce platform to empower and enrich our 12 lakh small retailers and shopkeepers in Gujarat,” the Reliance chairman said. Jio currently has 280 million subscribers, while Reliance Retail operates nearly 10,000 outlets across more than 6,500 Indian cities and towns.
Ed-tech start-up, OnFees, claimed to have processed transactions worth Rs 50 crore on its platform since inception. Founded 17 months ago by Mayur Jain, Viral Dedhiya and Manisha Thakur, the start-up simplifies the admission process for schools and colleges across Mumbai and Pune for multiple courses and provides assistance for their revenue management and administration needs. Institutes mostly tie-up for cost efficiency, resource optimization, revenue management, gain access to a larger student base for admission forms and in getting the necessary accreditation from various regulatory bodies. Over 100 colleges and one lakh students have been digitally enabled through the platform.
Online travel platform EaseMyTrip CEO and founder Nishant Pitti said that the company is open to mergers and acquisitions specifically in the hotel space. EaseMyTrip clocked profits of Rs 30 crore last year and generated revenues of Rs 1500 crore in the first six months of this year. Pitti said the firm's USP is that they don't charge convenience fees, unlike other OTAs and airlines. The company, which offers air tickets, hotels, railways, bus tickets, car rentals, and holiday packages, is looking to foray into the US, the UK, and Australia. It has operations in Dubai, Bangkok, Maldives, and Singapore.
The Central Board of Direct Taxes (CBDT) will soon issue circular directing tax officials not to demand payment of tax dues from start-ups where the assessment has already been completed. In cases where notices have been issued, no action will be taken, allowing investors to approach CBDT and get relief under the new, simplified scheme announced on Wednesday. Assessment was carried out in the case of 117 startups for assessment year 2016-17 and tax demands were raised for 19 of them. DIPP notified a new scheme on Wednesday for startups and their investors to shield them from the angel tax.
Digital lending platform Loantap has raised $8 million (Rs 57 crore) through a combination of debt and equity. The fundraising was led by Bengaluru-based early-stage venture capital fund 3one4 Capital. The round also saw participation by existing investors such as Shunwei Capital, Kae Capital, India Quotient, Tuscan Venture and angel investor Ashish Goenka. The company had raised $6.25 million in July last year. The Pune-based nonbanking finance company (NBFC) extends consumer loans, personal overdrafts, and rental deposit loans.
Oyo Hotels & Homes has received income tax notices for non-deduction of tax deducted at source (TDS) on payments made by the company in assessment year 2016-17. The income tax department in December had passed an order against the company and Oyo has filed an appeal against the order this week. In September last year, Softbank Vision Fund infused $800 million funding in Oyo, valuing the company at over $ 5 billion. Oyo claims it is present in more than 500 cities across India, China, Malaysia, Nepal, the UK, UAE and Indonesia, with over 13,000 hotels and 3,000 homes in its portfolio.
SoftBank is set to acquire an estimated 42% stake in BrainBees Solutions, which owns and operates omni-channel baby and mother care product retailer FirstCry. The deal is valued around $400 million. The Tokyo-headquartered investment giant has been scouting for fresh investments in Asia’s third-largest economy following its $4-billion Flipkart stake sale to Walmart last year. Morgan Stanley has acted as the financial adviser to the deal. The SoftBank has valued the eight-year-old Pune based venture at $600-700 million. FirstCry’s founders, Supam Maheshwari and Amitava Saha, will retain 12-14% equity stake.
Hotels in Sikkim have decided to boycott the services of Goibibo and MakeMyTrip (Go-MMT) amid an on-going dispute between hotels across the country and Online Travel Aggregators (OTAs). The Sikkim Hotels & Restaurants Association (SHRA) recently decided to terminate business contracts with Go-MMT. With effect from January 16, these hotels will not honour any new bookings coming from the OTAs. Many other hotel associations all over India have accused Go-MMT of charging exorbitant commissions, unfair accounting practices and, unauthorized additional discounting of hotel tariffs set by hoteliers.
Global video streaming market leader Netflix Inc and home-grown rival Hotstar plan to adopt self-regulation guidelines for content streaming in India in an effort to ward off potential government censorship, sources said. India currently does not have any law which mandates any censorship of content on online streaming platforms. Netflix was pulled into a legal battle last year after a complaint that its first Indian original series "Sacred Games" insulted former Prime Minister Rajiv Gandhi. The legal battled raised fears of an impending government regulation over the online streaming content.
The government on January 16 notified rules to allay concerns over angel tax issues faced by angel investors and start-up community. According to revised norms, only start-ups certified and recognized by the Department of Industrial Policy and Promotion (DIPP) will be exempted. A start-up will continue to be eligible if its aggregate amount of paid-up share capital and share premium after the proposed share issue does not exceed Rs 10 crore. Eligible investors are expected to have a minimum returned income of Rs 50 lakh for the financial year along with a net worth of Rs 2 crore or more.
According to a PwC report, the new FDI norms in the e-commerce sector which will kick in from February 1, can reduce the online sales by up to $46 billion by 2022. Under the changes, e-commerce marketplace firms will not be able to sell products via entities in which they have an equity interest nor allow sellers to sell exclusively on their platforms. The report also said that by March 2022 the new e-commerce policy could create 1.1 million fewer jobs than previously expected and lead to a reduction in tax collection by $6 billion.
Confederation of All India Traders (CAIT) on Wednesday urged the government not to accept any demand by large e-commerce players such as Flipkart and Amazon India to defer implementation of revised FDI norms for e-commerce. The traders’ body warned that any move to amend the policy will be opposed by the trading community. CAIT also demanded a probe into the activities of major e-commerce players over the last two-three years. Government's new regulations bar online marketplaces with foreign investment to sell products of companies in which they hold equity stake.
Flipkart’s Singapore based parent company has infused Rs 1,431 crore ($201 million) into its Indian wholesale entity, Flipkart India. The new round of infusion from the parent company comes just around a month after it poured Rs 2,190 crore in December 2018. Flipkart India and Amazon’s wholesale unit as well – Amazon Wholesale India Private Limited source goods directly from manufacturers and then sell them to third-party sellers which in-turn sell them to consumers via their marketplace platforms, that is, Flipkart Internet and Amazon Seller Services
Goods delivery by drones could soon become a reality in India after Minister of State for Civil Aviation Jayant Sinha unveiled the updated policy at the Global Aviation Summit on Tuesday. The revised law proposes to allow drones to operate beyond the visual line of site. The BS report said that the proposal to allow food delivery via drones came following the demand for the facility by various food delivery firms such as Swiggy and Zomato.
About 100 start-ups and the angel investor community have written to Prime Minister Narendra Modi seeking exemption from angel tax. The start-ups have demanded that Section 56 and Section 68 of Income Tax Act should not be made applicable to start-ups. Section 56 seeks to levy angel tax on the excess amount received by unlisted entities from issue of shares at a value higher than the fair value. Section 68 seeks to tax unexplained receipts in the books of accounts. Last week, Commerce minister Suresh Prabhu too had acknowledged the issue of angel tax.