Mumbai : A $2.5 billion spending spree involving more than two dozen deals provides some insight into how Mukesh Ambani is piecing together a strategy to take on Amazon.com Inc. in India.
Asia’s richest man is sharpening his focus on e-commerce with a string of tiny acquisitions and stake purchases to face the world’s largest online retailer, after shaking up India’s telecommunications industry with cheap data and free calls.
The acquisitions represent a new strategy for Ambani’s Reliance Group, whose founder — his father Dhirubhai Ambani — built a petrochemicals business and the world’s largest oil-refining complex from scratch. It’s a clear pivot toward consumer offerings in a country that’s becoming a battleground for giants such as Amazon.com and Walmart Inc.’s Flipkart Online Services Pvt.
“The deals may be tiny, but it’s more likely that they are putting together a team of talented people by acquisitions, who can then be invested in to build out larger platform products,” said Kunal Agrawal, an analyst with Bloomberg Intelligence.
Ambani is racing to grab a share of an online shopping market that Morgan Stanley estimates will grow to be valued at $200 billion by 2028 from about $30 billion last year. India will have 829 million smartphone users by 2022, according to Cisco Systems Inc., from a projected half a billion this year. That means a potential surge in demand for online services and products from music to food delivery, electronic gadgets and clothes.
Ambani outlined his plan to shareholders in July, saying the effort will involve the group’s unlisted businesses Reliance Retail Ltd. and Reliance Jio Infocomm Ltd. He has already spent about $36 billion on Jio, which has rolled out a nationwide 4G network and fibre broadband infrastructure, causing some established rivals to pull back.
The platform will use augmented reality, holographs and virtual reality to create an “immersive shopping experience,” said Ambani, 61. Reliance’s consumer businesses will contribute nearly as much to the conglomerate’s overall earnings as its bread-and-butter energy businesses by the end of 2028, he said.
The service will seek to get on board the millions of mom-and-pop stores that dominate the Indian retail market, providing heft to its operations. Chains and large department stores account for only 10 per cent of the market.
The Reliance e-commerce platform would enable small merchants to “do everything that large enterprises and large e-commerce players are able to do,” Ambani said. A spokesman for Reliance Industries declined to comment on the progress of the plans.
The acquisitions will help bolster this network of partners. Last week, Reliance said it would spend 7 billion rupees ($101 million) to buy and fund the expansion of Haptik Infotech Pvt., a company that provides customer support chat services using artificial intelligence.
Radisys Corp. will help Reliance in enhancing its presence in the so-called Internet of Things and 5G in a bid to launch its broader e-commerce business, while Vakt Holdings will build a digital ecosystem leveraging block-chain technology. Grab a Grub will help Reliance deliver food, groceries and other merchandise using bikes as a delivery method in a hyper-local approach. Infibeam Avenues will help create e-commerce market places, Mint reported on its website.
The “acquisitions will help Reliance create a unique and a very powerful digital economy ecosystem for Reliance, which is way beyond simple merchandise e-commerce,” says Arvind K. Singhal, chairman and managing director of Technopak Advisors, a management consulting firm.
The combined value of the acquisitions doesn’t include a recently terminated 2017 deal by Jio to buy airwaves, towers and fiber assets for 173 billion rupees ($2.5 billion) from younger brother Anil Ambani’s Reliance Communications Ltd.
Ambani’s e-commerce plans have already won the support of investors. Shares of Reliance Industries Ltd. surged 48 percent in the past 12 months and touched a record high on April 1. The rally boosted Ambani’s net worth by $9.7 billion this year to $54 billion, according to the Bloomberg Billionaires Index.
CBDT refutes social media rumours on ITR filing, says no change in IT return forms
New Delhi: The Central Board of Direct Taxes (CBDT) has refuted rumours in social media regarding difficulties in filing return of income by taxpayers, stating that no change has been made in income-tax return (ITR) forms.
“No changes have been made in any of the Income-tax Return (ITR) forms including ITR-2 and ITR-3 since the notification made on April 1 2019, i.e. on the 1st day of the Assessment Year 2019-20,” CBDT said.
“It is reiterated that there are no changes in the notified ITR forms; only the utility has been updated to facilitate the taxpayers. Therefore, the assertion that numerous changes have been made in ITR-2 and ITR-3 on July 11, 2019, does not give a correct picture,” it added.
There were reports in social media that the taxpayers were facing difficulties in filing return of income in ITR-2 & ITR-3 due to large scale changes in the ITR form on July 11.
CBDT stated that the software utility for e-filing of all the ITR forms were released long back. The utility for e-filing ITR-2 and ITR-3 was released on May 2 and on May 10 respectively.
However, the software utility update is a dynamic process and is continuously taken up as per the feedback received from the users/filers to ease their experience in electronic filing of returns, it added.
CBDT further clarified that the updating of utility does not hamper filing of return as the taxpayers are allowed to file using the utility which is available at that point of time.
“For example, more than 85 lakh taxpayers have filed returns in ITR-1 till date by using the said utility, which has also undergone update later. Therefore, the impression that the taxpayers are not able to file return due to changes in ITR form is also not correct as more than 1.38 crore taxpayers have already filed their returns by using the utility released till date. Even though the utility is being updated regularly to provide ease to taxpayers, the returns filed by using the previous version of utility will continue to be valid,” it said.
Lagarde resigns as IMF chief, starting race for her successor
Washington: International Monetary Fund chief Christine Lagarde submitted her resignation from the global crisis lender, citing more clarity about her nomination to lead the European Central Bank as European legislators approved a new top bureaucrat.
Lagarde said in a statement her resignation was effective Sept 12, firing the starting gun for the IMF’s search for her successor, which is likely to be another European.
“With greater clarity now on the process for my nomination as ECB President and the time it will take, I have made this decision in the best interest of the Fund,” Lagarde said in a statement.
She said her resignation would expedite the selection for the next head of the IMF.
IMF succession is expected to be a major topic of discussion among G7 finance ministers and central bank governors meeting on Wednesday and Thursday in Chantilly, France, near Paris amid concerns that slowing global growth and trade conflicts will pressure vulnerable economies.
Lagarde’s resignation, first reported by Reuters, came two weeks after her nomination on July 2 for the ECB’s top job. She did not immediately quit the IMF because of uncertainty over whether the new European Parliament would support her and other new EU leadership positions, sources told Reuters.
Her nomination was part of a package of top officials agreed by EU governments that included German Defence Minister Ursula von der Leyen as European Commission president, who drew Green party opposition.
Later on Tuesday, von der Leyen was approved by the European Parliament in a 383-327 vote.
The European parliament will hold a nonbinding vote on Lagarde’s appointment, which is expected to be finalized by EU leaders at a regular summit on Oct 17-18.
Centre to launch portal to help Jet Airways staff find jobs, in touch with SpiceJet and IndiGo
Mumbai: The government may not have extended support to now-defunct Jet Airways, but it has promised to facilitate employment to job-less airline staff.
The Civil Aviation Ministry is in touch with other private airlines such as SpiceJet and IndiGo to assist Jet staff get meaningful employment.
Civil Aviation Minister Hardeep Singh Puri said that a website would be launched listing staff of Jet Airways and help find employment in other private entities.
“We are also producing a website which is ready. I wish I had the capacity of telling you that the website is up. Every employee would be listed there and the prospects for their re-employment or employment will be facilitated by the government,” Puri said while replying to Members in the Rajya Sabha on the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019.
The Minister, however, said that government cannot assume responsibility for a business failure conducted by a private party.
Referring to Jet Airways, Puri said he was sensitive to (business) failure and willing to see what can be done within the governmental system to cushion that failure.
“But to suggest that a private sector entity goes belly up and the government has to take the responsibility I don`t think that is correct,” the Minister said.
Run out of cash, Jet Airways had suspended its entire operations on April 17. Subsequently, the government re-allocated its slots and foreign traffic rights to rival carriers. Lenders to the airline led by State Bank of India (SBI) have initiated bankruptcy proceedings against it after all attempts to rope in a buyer failed.
Before the airline suspended its operation, it had nearly 20,000 staff on its rolls. Several hundreds of them are learnt to have joined other carriers.
Replying to Members on the Airports Economic Regulatory Authority of India (Amendment) Bill, 2019, he also countered a comment that airfares had gone up.