OPINION, P2 MIND & GAMES Minimum government, maximum damage IDEA EXCHANGE WHY SCIENTISTS LOVE TO STUDY DOGS (AND OFTEN IGNORE CATS) Madhav Chavan ‘We are focused on IITs, primary schools, not on institutions between them. That’s a problem’ Page 4 The research has lagged behind in cats. Also, they’re taken less seriously than dogs, something probably to do with societal biases Page 10 ACROSS THE AISLE , P CHIDAMBARAM Vol XVII No 19 Follow us on Twitter & Facebook. App available on App Store & Play Store WWW.FINANCIALEXPRESS.COM LEISURE RHYTHM DIVINE FINANCIALEXPRESS ON SUNDAY READ TO LEAD PUBLISHED FROM:AHMEDABAD, BENGALURU, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI, NEW DELHI, PUNE CHALLENGING TARGET Tough year ahead for disinvestment SPOTLIGHT ● AI sale, insurer listing, slew of IPOs, offers for sale to top government plan to meet the `80,000-crore target for 2019 PRASANTA SAHU New Delhi,March 3 ADRENALINE ATTRACTIONS Taking thrill to another level, there are several tourists who flock to conflict-ridden areas Page 7 WHILE THE CENTRE is poised to mop up awhopping `1 lakh crore from disinvestment in FY18, the target of `80,000 crore for the next year is challenging, as the pipeline is modest and markets have become volatile. Besides the privatisation of AirIndia-AirIndia Express (AIAIE) combine, the second tranche of Bharat 22 ETF and listing of the entity to emerge out of the merger of three PSU general insurers and several offers for sale (OFSs) are what the government is banking on. Other routes of disinvestment, such as buybacks by PSUs, strategic sales of a clutch of relatively smaller QuickPicks India,Vietnam vow to work for open, prosperous Indo-Pacific INDIAAND Vietnam on Saturday resolved to work jointly for an open, prosperous Indo-Pacific, along with an efficient and rules-based regional security architecture, seen as a message to China over its growing military expansion in the region, reports PTI. After talks between PM Narendra Modi and Vietnam President Tran Dai Quang, the two partners inked three pacts providing for cooperation in nuclear energy, trade and agriculture. PAGE 3 Non-bailable warrants against Nirav Modi, Mehul Choksi A SPECIAL court on Saturday issued non-bailable warrants (NBWs) against diamond traders Nirav Modi and Mehul Choksi in the alleged `12,700crore Punjab National Bank scam, reports PTI. The court issued the NBWs on applications filed by the Enforcement Directorate, one of the agencies probing the bank fraud cases registered last month. PAGE 3 ODD & EVEN SMITHA VERMA New Delhi, March 3 THE SALE OF featurephonesin the Indian market is on an upward swing. And standing testimony to its growing popularityis the launch of another feature phone byHMD Global, the makers of Nokia-branded phones. At the recently concludedMobileWorldCongress, held in Barcelona, the talking point was the nostalgia that Nokia brought with its 8110 phone. The old 1999 ‘banana phone’ has been now been reintroduced as 8110 4G phone,whichcanaccessanapp store forfavourites like Google Assistant, Google Maps, Google Search, Gmail, Facebook and Twitter. This was Nokia’s second repackaged offering after the iconic 3310 that the company launched last year. As per market research ROHNIT PHORE DISINVESTMENT PIPELINE FY19 `80,000 cr ~`15,000 cr ~`25,000 cr ~`13,500 cr IPO of the entity post-merger of 3 PSU general insurers Target Proceeds from second tranche of Bharat 22 ETF Air India-Air India Express sale ~`20,000 cr ~`6,500 cr Through OFS in several PSUs including IOC From buybacks, other strategic sales and IPOs If some of the plans flutter, the Centre could monetise a portion of Suuti holdings, including in Axis Bank and ITC; Sale of entire stake in GAIL or the firm's retail business an option too companies and listing of several other PSUs would also be explored. Officials said the government will shortly invite expression of interest for AIAIE,whichwould be offered to investors as one unit, while other non-core assets and nearly half AI’s `60,000 crore debt could be housed in a special purpose vehicle for monetisation separately. Though valuations are yet to be disclosed,officials reckon that receipts from the sale of AI-AIE next year could be around `25,000 crore, largely for its fleet of 115-odd aircraft and the national carrier’svaluable bilateral flying/landing rights and parking slots at airports across the world. While two PSU general insurers, GIC Re and New India Assurance, have already been listed, the remaining three such insures — Oriental Insurance Company, United India Insurance Companyand National Insurance Company — will be amalgamated and the combined entity will be listed next year to fetch around `15,000 crore.GIC Re and New India Assurance had fetched `21,070 crore or21% of the disinvestment revenue in FY18. The Centre’s disinvestment proceeds this fiscal are poised to comfortably exceed `1 lakh crore,more than double the level achieved lastyear, against the target of `72,500 crore for FY18. It has netted `92,500 crore so far,with the sale of its entire stake in Hindustan Petroleum Corporation to Oil & Natural Gas Corporation to garner a handsome `36,915 crore. However, the options of big deals are limited for next year. Besides loss-making AI, the Centre is mulling to divest either its 53.95% stake in GAIL or the firm’s gas utility business. Indian Oil and Bharat Petroleum Corporation have shown interest in acquiring GAIL. The Centre’s stake in GAIL is estimated to be around `42,000 crore at current market prices. Though doable if needed, the proposed GAIL stake sale is premature at this stage, officials said. After ONGC’s acquisition of HPCL, the sale of GAIL would also fit into the Centre’s plan of creating large PSU oil conglomerates to compete globally. Officials are also pinning hopes on a line-up of OFSs, including in Indian Oil,NHPC and SAIL, which could fetch the Centre around `20,000 crore next year. BJP pushes out Left in Tripura ● Likely to form govt in Nagaland; hung assembly in Meghalaya NORTH-EAST VOTES Meghalaya (59/60) 21 19 2 8 9 Cong NPP BJP UDP+ Others Tripura (59/60) BJP+ Left Cong Others Nagaland (60/60) 29 29 0 2 BJP+ NPF+ Cong Others BJP supporters in Agartala, Tripura, on Saturday ESHA ROY, LIZ MATHEW & DEEPTIMAN TIWARY Agartala/New Delhi, March 3 TWENTY FIVE YEARS of Left Front rule in Tripura collapsed in spectacular fashion Saturday when the BJP and its ally, Indigenous People’s Front of Tripura, stormed the communist citadel to secure what appeared to be a two-thirds majority in the 60-member House. Continued on Page 11 Customisation name of game in travel industry Investors rekindle their love affair with start-ups ● From online travel currency to unique experiences, customers have options galore ● PE funding in Indian start-ups shows vigour after a lull MEGHNA SHARMA Mumbai, March 3 MAKEMYTRIP,AN online travel operator,has once again listed SoftBank-backed OYO’s chain ofhotelsacrossitstwoprimary platforms. The move comes two years after it had removed the online budget hotel aggregator from its sites, citing strategic overlaps. This only proves that with the travel industry constantly evolving, one needs to change with the changing times. AspertheDemystifyingthe Indian Online Traveller report by The Boston Consulting Group (BGC) and Google, the Indian travel market is projected to grow at 11-11.5% to $48 billion by 2020, with domestic demand (business and leisure) and foreign demand driving this growth. PP THIMMAYA Bengaluru, March 3 India’s domestic air traffic nearly doubled to 117 million passengers in 2017 with 100 flights taking off every hour. Changes in customer behaviour have brought the onlineversus offline debate to the fore for the travel sector as well. At the turn of this century, planning a trip meant either visiting a local travel agent, referring to a guidebook or relying on the recommendation of friends and family.However,today,owing to technological advancements, individuals can now book and plan their entire travel online. ON TUESDAY LEAVING ON A JET PLANE “With the advent of online travel agents likeYatra,people have become DIY travellers who plan, manage and book travel online,” says Sharat Dhall COO (B2C), Yatra.com, adding thatwith over400 million mobile internet users, India offers tremendous growth opportunityforonline travel companies. The new-age traveller demands more experiences as compared to regular itineraries. Social media plays a great role in influencing today’s travellers and creates a demand for destinations and experiences. This only means that the war has intensified with both offline and online players going beyond the usual to attract the travelhungry customer. Continued on Page 11 START-UPS CONTINUE to rule the roost in the private equity (PE) funding space in India for the month of January this year, accounting for the largest volumeofdeals.Thisjustindicates continued investor interest in this segment. Grant Thornton, the global consultancy and accounting firm, in its deal tracker report forJanuary2017,saidstart-ups continued to rule PE deals by reporting 18% of the total PE dealvaluesand44transactions, contributing to 52% of the PE dealvolumes. Pankaj Chopda, director, Grant Thornton India, said, “Increasingcustomerpenetration in online transactions and increasing solutions to simplify online transactions will attract interest in start-ups engaged in retail, fintech, foodtech,on-demand services and travel and logistics.” As per Grant Thornton, the increased volume of deals for start-ups is in line with the trendsofthepastfouryears.Private equity deals recorded 4% increase in deal volumes and 23% increase in deal value in January 2018 as compared to January2017. Private equity funding in Indian start-ups has shown renewed vigour after a certain lull in 2016 and early part of 2017. This was largely visible among the B2C e-commerce companies, which continuouslyshowedexpandinglosses Top sectors based on deal value (%) Real estate Start-ups Banking & financial services SMALL IS SELLING Feature phone market share (%) Q4 2016 55 Q4 2017 37 6 11 Itel 7 9 Micromax 9 25 Samsung 15 Jio 26 Others Nokia (Counterpoint market research Q4 2017) that have contributed to the popularity of feature phones. Longer battery life and lower cost being the key reasons that make it more appealing in tierII,tier-III and rural areas.Most feature phones are priced anywhere between `500 and `2,000. For an urban user, its long battery life appeals as a companion phone or a phone tobeusedduring‘digitaldetox’. “Given oursocio-economic milieu, feature phones offer certain inherent advantages oversmartphones,”saysAshish Bhatia, Delhi-based technology writer.“They are far more affordable.As these devices are not very feature-rich, they’re easier to use for the non-tech savvy.There’s no denying that feature phones offer better batterylife.This can be a major factor in areas where electricity supply is an issue,”he adds. The lackluster quality of low-cost smartphones has further propelled the popularity of feature phones.“The sale of Continued on Page 11 Top sectors based on deal volume (%) Start-ups IT & ITES Others 18 52 18 23 25 Others 16 Energy & natural resources Longer battery life, low cost key factors for popularity; many using them for ‘digital detox’ as well 2016thenumberwasat58%,” says Shobhit Srivastava, researchanalyst,Counterpoint Research. “The number is going to go up further in the current quarter, as is evident from the preliminary figures,” he adds. Globally, too, the smartphone market has been facing a slump.Global sales of smartphones to end users totaled nearly408 million units in the fourth quarterof 2017,a 5.6% decline overthe fourth quarter of 2016, as per research and advisory firm Gartner. This is the first year-on-year decline since Gartner started tracking the global smartphone market in 2004. There are several factors while requiring huge amount of capital. Onthecontinuedinterestin start-upsbytheinvestingcommunity,V Balakrishnan, chairman,ExfinityVenturePartners, a private equity fund, said the investor groups in India are becoming more widespread withhighnetworthindividuals and family offices now pursuing start-ups. “These groups havestartedtoallocateapartof their portfolio for investing in start-ups,”he remarked. : Feature phones continue to ring loud firm Counterpoint Research, India’s overall mobile shipments grew by 37% in the fourth quarter of 2017, with feature phones growing at an ‘astonishing’ 55% in that period. Feature phones essentiallyhave features such as the ability to access the internet, but they lack the advanced functionalityof smartphones. While the smartphone shipment grew merely by 12%, feature phones have made an astounding comeback in the Indian market. “The market for feature phonesinIndiahasbeengrowingsubstantiallyinthelasttwo years.The overall shipment of feature phones in India in 2017 was at 64%, while in 43 16 0 0 ABHISEK SAHA NEW DELHI SUNDAY, MARCH 4, 2018 18 Pages, `8 (Patna `11, Raipur `10) Musicians from south-east Asian nations find inspiration from neighbouring countries Page 8 low-cost smartphones have gone down considerably. The low-end smartphones priced around `5,000 are not meeting consumer expectations,” says Anshul Gupta, research director,Gartner.“So upgrades from feature phones to smartphones have slowed down due to a lack of quality ultra-lowcost smartphones and users preferring to buy quality feature phones,”he adds. Another disruptor in the mobile phone market is RelianceJio.Ithascapturedthe lion’s market share through its attractive offerings. “Jio’s strategy worked beautifully. First they introduced a low-cost smartphone andthentocapturethefeature 10 7 Banking & financial services 18 7 6 Pharma, Real healthcare estate & biotech phone market, they launched JioPhone 4G lastyear.Thisway evenwhenfeaturephoneusers upgrade, they will not leave Jio,” says Srivastava. As per Counterpoint Research data, Jio Phone was the top feature phone brand in the quarter that ended in December by shipments,witha26%market share for devices under `2,000. Jio’s `49 prepaid recharge plan offers 1GB of 4G data for a period of 28 days for users of JioPhone. Feature phone players in India are predicting better sales in 2018.“We will be closing FY18 with 30% annual growth rate,” says Victor Su, director, FORME mobiles India. Based in China, FORME operates in India, the Middle East, Africa, Southeast Asia, Europe and other countries and regions. Continued on Page 11
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