Tata Sons to invest $1 billion more in digital arm

Tata Sons is poised to invest about $1 billion in Tata Digital, over the next few years, people familiar with the matter said. This comes as the parent of the diversified Tata group puts a pause on external fundraising for the ecommerce entity, which houses the superapp, Tata Neu as it reviews its digital strategy with the appointment of a new chief executive officer this week, the people said. Tata Digital will only tap external investors after the new CEO sets down to focus on execution and scale, one of the persons said. Earlier this week, Tata Digital appointed Naveen Tahilyani, the former managing director of Tata AIA Life Insurance, as its CEO & MD. Tahilyani replaced Pratik Pal who had been holding the charge since the company’s inception in 2019.Tata Sons has invested more than $2 billion in Neu so far and has board approvals for further capital infusion over a five-year period, the people said.  A spokesperson for Tata Sons did not respond to ET’s queries. Multiple people aware of the management changes said Tata Sons chairman N Chandrasekaran wanted a senior hand with consumer background to steer the next stage of expansion for Neu. “The top brass wants Tata Digital to work on making its operational structure more efficient and agile and scale up the business,” a person said.   

‘WTO not place for discussing labour, environment issues’

International trade experts have pointed out that developed nations have been pushing for non-trade issues in the garb of sustainability to reverse the growing trade deficit that it has with the developing nations. rules of the WTO but also have systemic implications for international law as a whole, since unilateral action undermines multilaterally negotiated rights and obligations of countries,” the official said. Last year in May, India had submitted a paper in the WTO to express its concern over use of environmental measures as protectionist non-tariff measures emphasizing unilateral measures such as EU’s carbon tax and deforestation law could disrupt global trade. India has been joined by countries including Russia, and Brazil, who have also flagged similar concerns over European Union’s (EU) carbon tax and deforestation regulation in a meeting of the WTO in Geneva, arguing that these measures would affect their industries. The EU has decided to impose a carbon tax CBAM on certain sectors like steel, cement, fertilizer, aluminum and hydrocarbon products from 2026. In 2022, India’s 27 per cent exports of iron, steel and aluminum products worth $8.2 billion went to the EU. India’s exports of products like coffee, leather hides and paperboard worth $1.3 billion annually to the EU will get impacted due to the deforestation regulation adopted by the EU last year, as per think-tank Global Trade Research Initiative (GTRI).  

Paytm asks merchants to link QRs to other banks’ accounts

Following the Reserve Bank of India’s (RBI’s) strictures on Paytm Payments Bank (PPB) last week, Paytm has directed its field sales executives to migrate merchant QR codes from their existing PPB accounts to accounts with other banks. For example, Manoj Kumar, who works for a retail chain ‘More’ in Indirapuram, Ghaziabad, said that representatives of the fintech major asked them to move the store’s funds from PPB to other bank accounts before February 29. The process has started over the weekend itself and the fintech major is trying to sensitise as many merchants as possible before the deadline of February 29 to ensure that their business transactions can continue unhindered. “We have been asked to migrate as many QRs as possible to alternate bank accounts by the end of the month,” said area sales executives Fe spoke to. This comes against the backdrop of panic that has spread among a section of merchants. As per a survey of 5,000 retailers on Paytm by Kirana Club, 68% of the respondents said that they have decreased their trust on the firm since RBI’s announcement. While merchants need to shift their PPB accounts, the good news is that the QR code, soundbox or card machine will not require any physical changes, the company confirmed. “In instances, where our associate PPB operates as a back-end bank, these services can seamlessly be transitioned to other partner banks. This means that for our merchant partners, there will be no disruptions, no need to revisit existing setups, and no additional effort,” said a company spokesperson.  

Setting India on the innovation journey

Innovation has often been an important aspect that distinguishes entities across the world. A business that keeps innovating survives and thrives. A country that inculcates innovation in its society doesn’t only keep the economy roaring but also empowers entrepreneurship and keeps its businesses growing. The developed block of countries and their businesses understood this advantage and continued their innovation journey by attracting the best global minds to their geographies.  India, in the past few years, has started this journey, and the trajectory of becoming a $10 trillion economy and a developed nation hinges significantly on its transformation to a scientifically advanced country and a global leader in innovation. Government initiatives aimed at fostering creativity in education and incentivising careers in science underscore India’s steadfast commitment towards nurturing its innovation ecosystem. India’s ancient history is full of innovators and researchers who were constantly contributing to research and innovation that has withstood the test of time.  India’s remarkable rise in the Global Innovation Index (GII), soaring to the 40th position out of 132 countries in 2023, reflects its resolute dedication to promoting innovation. The GII, complemented by the India Innovation Index published by Niti Aayog and the Institute for Competitiveness, also empowers states to measure their innovation-driven progress against global benchmarks. In a landmark move, Union finance minister Nirmala Sitharaman outlined a bold vision for India’s technological future as she presented the interim Budget 2024. Central to her announcement was the allocation of a substantial Rs 1 trillion corpus to bolster technology research, signalling a transformative leap towards fostering innovation and self-reliance. While the specifics are awaited, the announcement heralds a new era for India’s tech landscape, highlighting the pivotal role of innovation as the cornerstone of national development.  

Morgan Stanley sees opportunity, buys shares worth ₹244 crore

Morgan Stanley on Friday bought shares worth ₹244 crore in Paytm's parent company One97 Communications, representing a 0.8 per cent stake Financial services giant Morgan Stanley on Friday made an investment in Paytm's parent company, One97 Communications, by acquiring shares worth ₹244 crore through an open market transaction.Morgan Stanley, via its affiliate Morgan Stanley Asia (Singapore) Pte - ODI, purchased 50 lakh shares on the National Stock Exchange (NSE), representing a 0.8 per cent stake in Paytm. The average price per share was ₹487.20, resulting in a total deal size of ₹243.60 crore. However, details about the sellers remain undisclosed, PTI reported.This comes after the banking sector regulator has found potential violations, including the misuse of customer documentation rules and non-disclosure of material transactions. Paytm shares price faced another 20 per cent decline on the NSE. This adds to a total of 36 per cent drop in the share price in just 2 days after the Reserve Bank of India (RBI) directed Paytm Payments Bank Ltd (PPBL), an associate of Paytm, to cease accepting deposits or top-ups in various accounts, wallets, and instruments from March 1. Morgan Stanley, via its affiliate Morgan Stanley Asia (Singapore) Pte - ODI, purchased 50 lakh shares on the National Stock Exchange (NSE), representing a 0.8 per cent stake in Paytm. The average price per share was ₹487.20, resulting in a total deal size of ₹243.60 crore. However, details about the sellers remain undisclosed, PTI reported.In related news, there are reports that the RBI is contemplating revoking the license of Paytm Payments Bank as early as next month.    

Orios Venture Partners sells nearly 3% stake in Country Delight for Rs 225 crore

Orios Venture Partners has made a partial exit from direct-to-consumer (D2C) fresh food brand Country Delight for around Rs 225 crore. People familiar with the matter said the early-stage venture capital firm has sold about a 3% stake in Country Delight to Temasek-backed asset management group Seviora. Orios had invested Rs 15 crore in Country Delight from its Fund-I, of which the first cheque of Rs 3 crore was infused in 2017. The firm had subsequently invested additional sums in Country Delight through its later funds.Across all its investments in the D2C company, Orios held 21-22% stake in Country Delight prior to the partial exit.On January 5, ET reported that the Gurugram-based company raised around $20 million (around Rs 164 crore) in a funding round led by one of its existing investors, Singapore’s sovereign fund Temasek. Another existing backer, Venturi Partners, also participated, in addition to Seviora, which invested through its agriculture and food-focused investment vehicle Seviora T3F Fund. The round valued Country Delight at around $820 million. Orios launched Fund-I in 2014, with a final close of Rs 300 crore in 2015. In January, the Mumbai-based investment firm announced that it had returned the initial corpus to its limited partners, or sponsors of the fund. Among the various sectors, Fund-I allocated 27% of its corpus to ecommerce marketplaces, followed by D2C at 18%, and healthtech at 14%. Key portfolio companies that emerged from the fund include Country Delight, PharmEasy, Intelligence Node, and Zostel. Orios also counts BatterySmart, Vedantu, Ixigo, Mobikwik and CarDekho among its portfolio companies. It had also backed beleaguered car repair startup GoMechanic but had to eventually write off the investment after GoMechanic’s founders admitted to financial wrongdoing. The Rehan Yar Khan-led investment firm also saw two of its managing partners Anup Jain and Rajeev Suri depart in September 2023.    

US Economy Today: Federal Reserve Officials Beat the Confidence Drum

Welcome to Investopedia's economics live blog, where we'll explain what the day's news says about the state of the U.S. economy and how that's likely to affect your finances. Here we will compile data releases, economic reports, quotes from expert sources and anything else that helps explain economic issues and why they matter to you. Today, another batch of Federal Reserve officials will offer their opinions on the Open Market Committee's path forward.Boston Fed President Susan Collins was another in the line of Federal Reserve officials who broadly said they needed more “confidence” that inflation is sustainably declining before cutting interest rates. She did, however, lay out a few fundamental indicators she is watching.  In remarks to the Boston Economic Club, Collins said housing inflation was taking longer to come down than other categories and she wants to see more progress there. Consumers’ inflation expectations needed to remain “well anchored." Recent consumer confidence surveys have jumped as people start to feel better about inflation and the economy. Collins also said she is closely monitoring wages, pointing to data from Boston Fed economists. The data suggests “there is room for wages to catch up and continue increasing at a healthy pace for some time without necessarily spurring inflationary pressures” due to gains in productivity. However, she was looking to see declines in labor demand to help bring better balance. Employers continued to add more jobs than anticipated in January, while wages also surged.Inflation should continue to decline, so long as consumers begin to put away their wallets, Fed Governor Adriana Kugler told the Brookings Institute Wednesday.  

Been Moving Mountains": The Founder of BYJU Sends Staff an Email Concerning Delayed Salary

Despite rumors that the ed-tech company would postpone paying its employees for the month, BYJU's has now paid their salaries for January. Byju Raveendran, the founder, thanked his staff in an email, saying he had to "move mountains" in order to make the payroll. Once valued at $22 billion, the company was thrown into a severe financial crisis when it was founded in 2011 and began to face lawsuits from lenders and accusations of violating the Foreign Exchange Management Act (FEMA).   Despite having been told they might not get paid until Monday, Mr. Raveendran told his staff that the January salaries have already been paid.I am aware that you were informed that your pay would be received by Monday. Many of you wrote to me saying that you understood what I was going through and that you wouldn't mind waiting even longer. However, you were not required to wait until Monday," he stated.   Payroll expenses account for almost ₹ 70 crore of BYJU's monthly expenditure, as reported by Moneycontrol.   "I have been moving mountains for months to make payroll, and this time, the struggle was even bigger to ensure that you receive what you rightfully deserve," he stated.   He also expressed gratitude to his staff members who persevered and kept working for the business in spite of difficulties.Everyone is a little worn out from this battle, everyone has had to make sacrifices, and everyone has struggled with decisions they never wanted to make, but nobody has given up. This is a result of our pride in the creations we have made. We know we've had enough when we have self-respect," Mr. Raveendran declared.   Lenders from abroad have filed lawsuits against BYJU due to its missed payment deadlines. Even more, its Alpha unit filed for bankruptcy following the lenders' filing of an insolvency petition in a US court. In addition, the Enforcement Directorate (ED) is conducting raids due to claims of FEMA violations, which has caused multiple resignations from the organization.   You can only listen to the newest music on JioSaavn.com. At $250 million, its most recent valuation is less than its peak worth Earlier this month, BYJU's resisted a resolution put forth by its shareholders to remove its founders from the board, arguing that the investors lacked the ability to cast votes to alter the company's top management.    

Tax buoyancy cannot continue year after year, says DEA secy Ajay Seth

A day after the Interim Budget was tabled in the Parliament, Economic Affairs Secretary Ajay Seth spoke to Ruchika Chitravanshi and Asit Ranjan Mishra on the government’s thinking behind the major budget projections and the fiscal math. Edited excerpts. I have treated FY23-24 as the first year where all segments are doing well. In 2022-23, there were still a few areas that were coming out of the impact of the pandemic. In FY23-24, the profitability of the corporate sector and the general economy, which is reflected more through the GST numbers, are doing well. We expect buoyancy to continue next year, but it cannot continue year after year. It (the revenue projection) arises out of all sectors doing well and the formalisation of the economy helps in making sure the tax domain gets widened. The major non-tax revenues include disinvestment, dividends from banks, PSUs, RBI, and spectrum charges. They account for almost 80-85 per cent of the non-tax revenue. We have an interaction with each of the stakeholders and that is how we arrive at the number. We think it is a reasonable number. You have to look at it from what base we are coming from. A large portion is on fertiliser prices. These are the estimates based on the current prices as well as the outlook for the next year. It is not as if fertiliser consumption is coming down, it is a question of the price. Prices had shot up during the post-pandemic period. It is a combination that has been put through. Instead of looking at the disinvestment and monetisation as a separate basket, those have been looked at together and that is how a combined number has been indicated in the budget document. Monetisation has two kinds of flows -- one which comes to the PSU or the agencies such as NHAI and they plough back to their future investment. There will be certain monetisation that will come through the sale of securities, and physical assets. There have been years where monetisation proceeds have been more than estimated and vice versa might have been for disinvestment. We felt it was better to have a combined number.    

Will Elon Musk Get What He Wants If Tesla Moves To Texas? Analysts State

Due to the absence of precedent and distinct regulations in Texas' business courts, Elon Musk's proposal to relocate Tesla from Delaware may not grant the CEO of the electric carmaker the extra flexibility he seeks, according to legal experts. Following a crushing defeat this week in Delaware's Chancery Court, which nullified his $56 billion compensation package, Musk declared on social media on Thursday that Tesla would "move immediately to hold a shareholder vote to transfer state of incorporation to Texas."Later on Thursday, Musk said, "Change your state of incorporation out of Delaware before they lock the doors."   If Musk's corporate relocation plan is approved by the board of directors at Tesla and the shareholders approve it as well, the electric vehicle manufacturer would move its incorporation from Delaware, the state in the United States with the largest number of registered companies because of its two-century-old corporate legal system. Due to this certainty, Delaware has long been favored by businesses; however, Musk may upend this by moving Tesla and enticing others to follow.It takes time and volume to build up a body of case law that makes the courts a trustworthy venue for business disputes, which is why Delaware has a clear advantage, according to Edwards.   A number of states, including Texas, have passed "constituency statutes," which guarantee business executives' ability to take into account interests other than maximizing profits for stockholders. He said that Delaware is not one of them.  

Despite Paytms attempts to soothe investor concerns about a negative impact on its business

In spite of Paytm's efforts to allay investor concerns about a blow to its business, the company's shares saw a 20% decline on Friday as a result of the central bank's crackdown on its payments bank. For the second day in a row, Paytm shares were trading at 487 rupees, the lowest point in more than a year, at the bottom of a trading band set by the exchange. The company's shares have now dropped 36% this week.   Paytm CEO Vijay Shekhar Sharma tweeted on Friday, "Your favourite app is working, will keep working beyond 29 February as usual," in an effort to ease app users' anxieties."For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance," Sharma continued. Concerns about earnings from the company's primary payments division were raised when the Reserve Bank of India (RBI) on Wednesday ordered Paytm Payments Bank to cease taking new deposits in its accounts or well-known digital wallets as of March 1.  

Infra focus, fiscal prudence are positives for street

The interim Budget on Thursday maintained the government’s focus on infrastructure development while surprising the street with its fiscal deficit target. In an election year, the government resisted the temptation to announce populist measures. For Financial Year 2024-25 (FY25), capital expenditure (capex) was hiked 17 per cent to Rs 11.1 trillion. In FY24, capex was hiked by 33 per cent. The fourth straight hike is expected to take the capex to gross domestic product (GDP) ratio to 3.4 per cent in FY25 compared to 3.2 per cent in FY24.   ICICI Direct Research said capex growth is on a high base of the last four years and has tripled in that period, resulting in a multiplier impact on economic growth and the moderation in the interim Budget was on expected lines. The key takeaway was the aggressive fiscal deficit target of 5.1 per cent for FY25 compared to the market expectation of 5.5 per cent. The government said it is on course to hit the sub-4.5 per cent number for the metric by FY26. Its expectations are based on higher tax collections, dividends from the Reserve Bank of India and public sector companies, and control on expenditure.  With the fiscal deficit in check, the government’s market borrowing in FY25 is expected to be Rs 14.1 trillion compared to Rs 15.4 trillion in FY24. HSBC said small savings have played an important role in funding the fiscal deficit. The savings funded 27 per cent of the fiscal deficit in FY24 compared to 23 per cent in FY23.   However, India Ratings and Research said the system-wide capex growth hinges on continued recovery of state spending (up 42 per cent year-on-year in the first eight months of FY24) and hope of acceleration in tentative recovery in private sector capex. The states account for two-thirds of overall capex. In a flat market on Thursday, the Nifty PSU Bank Index was the biggest gainer among sectoral indices by jumping 3.1 per cent. Among other sectors, sentiment was also positive in the logistics space as the three largest listed companies by market capitalisation registered gains between 1-5 per cent.  The interim Budget announced a new housing scheme for the middle class as the ongoing Pradhan Mantri Awas Yojana (Grameen) aims to build crores of new homes. The proposals for housing and infrastructure development are expected to boost the real estate and building materials sectors. However, the Nifty Realty and the building materials companies ended in the red. The interim Budget did not have major measures in the consumer space. Consumption is weak, especially in rural India, as indicated by corporate earnings for the last few quarters. The Budget doesn’t provide any near-term solution for quick revival for consumption, said Motilal Oswal Financial Services.