Daily Archives: June 13, 2019

The retail giant’s total revenue increased $1.2 billion or 1 per cent for the three months ended April 30, 2019, due to the addition of Flipkart’s net sales besides other factors

Walmart is expected to pump $1.2 billion into Flipkart’s operations Flipkart. The world’s largest retailer acquired homegrown e-commerce company Flipkart for $16 billion last year, pitching it in direct competition with its rival Amazon.com in a battle for dominance of India’s online retail market.

As of April 30, 2019, and January 31, 2019, Walmart reported cash and cash equivalents of $2.7 billion and $2.8 billion, respectively, according to filings with the United States Securities and Exchange Commission made by Walmart last week. Of the $2.7 billion of cash, approximately $1.2 billion can only be accessed through dividends or inter-company financing arrangements, subject to approval of Flipkart’s minority shareholders. “However, this cash is expected to be utilised to fund the operations of Flipkart,” said the filing.

The net cash used by the Bentonville, Arkansas-based company in financing activities decreased $1.6 billion for the three months ended April 2019, compared to the same period in the previous financial year. This decrease was partially impacted by the Flipkart acquisition. Walmart reported a working capital deficit of $18.1 billion on April 30, 2019, compared to $21.5 billion in 2018. This decline was primarily due to higher current assets as a result of the consolidation of Flipkart.

Due to the anticipation of announcing Flipkart’s acquisition, Walmart had suspended its share repurchases. However, the share repurchases have increased $1.6 billion for the three months ended April 30, 2019, compared to the same period in the previous finanical year.

Walmart’s total revenue increased $1.2 billion or 1 per cent in the three months to April 30, 2019, when compared to the same period in the previous fiscal year. This increase was due to the addition of Flipkart’s net sales besides other factors.

During April-May this year, Walmart President and Chief Executive Officer (CEO) Doug McMillon and Judith McKenna, president and CEO of Walmart International, visited India to assess the progress made by Flipkart. They also met the senior leadership of Flipkart and group companies — Myntra and PhonePe — and is learnt to have discussed strategy to take on Amazon.

Amazon has stepped up its investment in India and recently pumped Rs 2,800 crore into its marketplace. The fresh investment comes at a time when the Seattle-headquartered firm has logged out from China. In December last year, Amazon invested Rs 2,200 crore in its Indian entity. Jeff Bezos-led Amazon has so far made over $5-billion investments in India. Some reports suggest that the company may have invested an additional $2 billion on top of that.

https://www.business-standard.com/article/companies/walmart-to-pump-1-2-billion-into-flipkart-says-filing-with-us-sec-119061300087_1.html

There are restrictions in trading of shares that are under Trade for Trade Segment

Stock exchanges will impose restrictions on trading in Jet Airways shares from June 28 as part of preventive surveillance measures to curb excessive volatility, according to a circular.

Cash-starved Jet Airways suspended operations in April and lenders are working on ways for revival of the airline.

In a circular, NSE said shares of the company would be shifted from “Rolling Segment to Trade for Trade Segment, wherein the settlement in the scrip will take place on gross basis with 100 per cent upfront margin and 5 per cent price band”.

There are restrictions in trading of shares that are under Trade for Trade Segment.

The decision has been taken jointly by the exchanges and would be effective from June 28, it said.

According to the circular, the company has failed to provide prompt responses to queries of exchanges regarding various rumours.

The responses received “are not clear and satisfactory”, it added.

Also, the company is not in a position to consider and approve audited financial results for the year ended March 2019 and there are also observations made by the airline’s auditor.

“… there are concerns with regard to continuity of flow of information about the company which is very vital for the appropriate price discovery in the scrip. Hence trading in the scrip may not reflect the actual status of the company,” the circular said.

Shares of Jet Airways fell 2 per cent to close at Rs 110.10 on the NSE Wednesday. It declined 1.38 per cent to end at Rs 110.40 on the BSE.

https://www.business-standard.com/article/pti-stories/stock-exchanges-to-impose-trading-restrictions-on-jet-airways-shares-119061201141_1.html

Cognizant has told a district court in New Jersey that the litigation over improper payments related to securing SEZ licenses in India has named two former Cognizant executives but not the company itself. Hence, Cognizant told the court that all claims against it should be dismissed.

A lawsuit, filed in 2018 by Union Asset Management Holding AG, Amalgamated Bank, acting as trustee for the LongView Collective Investment Funds, and the Fire and Police Pension Association of Colorado, alleged that Cognizant violated certain sections of the Securities Exchange Act of 1934 by making “materially incomplete, false, and misleading statements that concealed a bribery scheme.” The plaintiffs also alleged that this scheme overrode the company’s internal controls to facilitate the bribery.

Cognizant has responded in the latest court filing saying: “Far from the “pervasive operation” to secure “lucrative” SEZ licenses that plaintiffs allege, the conduct alleged in the DOJ (department of justice) and SEC (Securities & Exchange Commission) filings involved only “a limited group of rogue employees” who authorised improper payments to obtain routine permits and “conceal[ed that conduct] from corporate management”.

In February, SEC said that Cognizant has agreed to pay $25 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA), and two of the company’s former executives were charged for their roles in facilitating the payment of millions of dollars in a bribe to an Indian government official.

The SEC’s complaint had alleged that in 2014, a senior government official of Tamil Nadu demanded a $2 million bribe from the construction firm responsible for building Cognizant’s 2.7 million sqft campus in Chennai.

“As alleged in the complaint, Cognizant’s president Gordon Coburn and chief legal officer Steven E Schwartz authorised the contractor to pay the bribe, and directed their subordinates to conceal the bribe by doctoring the contractor’s change orders. The SEC also alleges that Cognizant authorised the construction firm to make two additional bribes totalling more than $1.6 million. Cognizant allegedly used sham change order requests to conceal the payments it made to reimburse the firm,” SEC said in a press release issued in February.

The SEC charged Coburn and Schwartz with violating anti-bribery, books and records, and internal accounting controls provisions of the federal securities laws.

A recent Law 360 report said Coburn filed a dismissal bid as well, saying that if the claims against Cognizant are dismissed, the investors will have no valid allegations against him either.

https://economictimes.indiatimes.com/tech/ites/cognizant-seeks-dismissal-of-claims-in-bribery-case/articleshow/69766890.cms?utm_source=ETTopNews&utm_medium=HPTN&utm_campaign=AL1&utm_content=23

Sivan said of the Rs 1,075 crore, nearly Rs 603 crore will be towards satellite development and the balance Rs 375 crore will be for the GSLV MK-III rocket

India plans to launch its second lunar mission Chandrayaan-2 on July 15, and once successful, aiming to be the fourth nation to land on moon, said Isro chief Kailasavadivoo Sivan on Wednesday.

GSLV MK-III, the rocket carrying Chandrayaan-2, will take-off from Isro’s space port at Sriharikota, near Chennai at 2.15 a.m. on July 15, he said.

“We are targeting to land on the south pole of the moon on September 6 or 7,” said Sivan.

Isro expects to continue its research on presence of water and minerals on moon after Chandrayaan-1 in 2008 released its Moon Impact Probe where it found debris that was analysed for presence of water.

According to Sivan, lunar south pole was chosen as it would be easy to land due to the flat surface and ample solar energy.

The rover will have 15 minute to land on the moon from its orbit, which the chief describes as the “most terrifying” part of the mission as it was never undertaken by Isro.

While the lander will have a life span of one lunar day, which is equivalent to 14 days in Earth, the orbiter lifespan is one year and during this period it will revolve around the moon.

Speaking about the cost, Sivan said of the Rs 1,075 crore, nearly Rs 603 crore will be towards satellite development and the balance Rs 375 crore will be for the GSLV MK-III rocket. Nearly 60 per cent of the satellite cost on the industry and nearly 85 per cent when it comes to the rocket.

Another interesting part of the 100 per cent indigenously developed mission is that both mission and project directors and nearly 30 per cent of the team will be women, said Sivan.

https://www.business-standard.com/article/current-affairs/india-s-second-moon-mission-chandrayaan-2-to-take-off-on-july-15-isro-119061200825_1.html

The previous high was in October 2018, when the retail inflation print came in at 3.38 per cent

Retail inflation spiked to a seven-month high of 3.05 per cent in May, remaining within the Reserve Bank of India’s (RBI’s) comfort level, as kitchen items like vegetables, meat and fish turned dearer, government data showed on Wednesday.

The consumer price index- (CPI)-based retail inflation for April was revised marginally upwards to 2.99 per cent from the earlier estimate of 2.92 per cent, according to the data released by the Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation.

Retail inflation stood at 4.87 per cent in May 2018.

The previous high was in October 2018, when the retail inflation print came in at 3.38 per cent. Vegetables prices witnessed a sharp rise in May at 5.46 per cent, as against 2.87 per cent in April 2019.

Prices of meat and fish went up by 8.12 per cent (from 7.55 per cent), while the inflation print for cereal and products rose to 1.24 per cent (from 1.17 per cent) in May this year.

However, prices of fruits continued to show a deflationary trend with prices falling by 5.17 per cent in May against 4.89 per cent in the preceding month. For fuel and light category, inflation stood at 2.48 per cent, as against 2.56 per cent in April.

Inflation for the overall food basket, based on consumer food price index, increased to 1.83 per cent in May, as against 1.10 per cent a month earlier, the data showed. “Given the delay in monsoon and sharp drought conditions in Maharashtra, the progress is important as food inflation has started to increase and can become sharp in case of specific crop failures especially pulses and oilseeds. Also horticulture becomes vulnerable to monsoon effects,” said Madan Sabnavis, chief economist at CARE Ratings.

Retail inflation is a crucial data point, keenly watched by the Reserve Bank, while deciding its monetary policy.

https://www.business-standard.com/article/economy-policy/retail-inflation-at-7-month-high-of-3-05-in-may-within-rbi-s-comfort-zone-119061201442_1.html