Assignment on PESTLE and SWOT Analysis

Submitted to: Prof. Vineeta Srivastava

Submitted by: Antriksh Kapoor

Walmart may be exploring ways to exit Bharti JV (Economical)

US retail giant Walmart is learnt to be in talks with Sunil Mittal-ledBharti group to explore ways to exit the six-year-old 50:50 joint venture in cash-and-carry (wholesale) business. This could mean an end to the talks for a possible partnership between the two firms in the multi-brand retail space - less than a year after 51 per cent foreign investment was allowed in the sector. A corporate lawyer close to the development said the American retailer was discussing the sale of its equity in the JV with Bharti. According to him, buyback of Walmart shares by Bharti was imminent. "Walmart is not happy with the way the JV is progressing," he said. According to a source in the know, the ongoing Enforcement Directorate (ED) probe into Walmart's $100-million March 2010 investment in buying compulsory convertible debentures (CCDs) in Cedar Support Service, a company owned by Bharti Enterprises that controlled Bharti Retail, is seen as the biggest hurdle for the JV. Walmart's investment in Cedar is being investigated for alleged violation of the Foreign Exchange Management Act (Fema), as FDI in multi-brand retail was not allowed in 2010. Without getting a clean chit on the ED probe, it's tough for the Walmart-Bharti JV to proceed, it is believed. Replying to a Business Standard questionnaire, a Walmart India spokesperson said: "We've made no announcements and don't comment on rumours or speculation." She added India was an important market for Walmart, "and we continue to study the implications of the new FDI policy on our business". The spokesperson was replying to specific questions on whether Walmart was talking to Bharti to exit the cash-and-carry JV and if the two had decided to part ways in multi-brand retail, too. A Bharti group spokesperson said: "The company does not comment on speculation." Group chairman Sunil Mittal did not reply to a text message sent to him. A person familiar with the workings at the organisation pointed to the top changes at both Bharti Retail and Walmart India as indicative of things to come. The strength of Ramnik Narsey, who was recently named the interim chief of Walmart India, replacing Raj Jain, is finance, and not operations. Even Viresh Dayal, who has been running the show at Bharti Retail after COO Mitch Slape returned to Walmart US, is a commercial/finance person. "That may be a sign of battle lines being drawn. Perhaps, the talk is more on valuation, returns and sale, rather than on expanding the business and opening stores," he said. Even the fact that Walmart is not planning to convert its $100-million convertible-debenture investment into equity in a Bharti company by September 30, the scheduled deadline for the conversion, is a giveaway, analysts say. Also, Pankaj Madan, a senior Bharti-Walmart executive who was among the five suspended in connection with an internal anti-corruption probe, was recently inducted into Bharti Airtel - in a step that some called a face-off between Bharti and Walmart. Madan will be part of the Bharti Airtel's Africa operation. But, industry watchers argue it's a complex deal for both Walmart and Bharti. Whoever buys a stake in Bharti Retail for a JV in multi-brand retail may have to pick the 50 per cent cash-and-carry share currently owned by Walmart. Bharti Retail is unlikely to go it alone in the retail business, as it is not seen as its area of expertise. Walmart, too, may have few choices in the Indian market if it wants to join hands with another retail player. There already is a buzz on who Walmart could tie up with - it was believed to be in active negotiation with the Future group for a deal a few years ago.

Political uncertainty and elections slated in the coming months, besides the condition of state-wise approval to retail FDI and tough sourcing conditions, were among the other roadblocks for retail chains, including the foreign ones, experts said. Also, the challenging global retail environment might force the likes of Walmart to focus on existing key markets.

Govt notifies changes in FDI norms for multi-brand retail (Political)

The government on Thursday notified changes, to be effective immediately, pertaining to foreign direct investment in supermarkets or so-called multi-brand retail trading, that the cabinet had cleared on 1 August. The notification comes as a formal assurance to foreign retailers such as Wal-Mart Stores Inc., Tesco Plc, and Carrefour SA that have in the past expressed plans to invest in opening supermarkets in the country. The changes were made after foreign retailers sought clarifications on the policy and met trade minister Anand Sharma to discuss these. The clarifications said that only 50% of the initial investment of at least $100 million made by the foreign retailer needed to go towards so-called back-end infrastructure (the worry for foreign retailers was that this was 50% of all investment). They also redefined small and medium enterprises from which such retailers had to source 30% of their products as those with an investment in plant and machinery of $2 million (as against the $1 million mentioned in the original policy). Finally, the clarifications also said the retail stores can be set up in any city allowed by respective state governments (and not only those with a population in excess of 1 million as mentioned in the original policy). In a response to Mint soon after the 1 August changes were made, an Indian spokesperson for British retailer Tesco said that the company welcomes the proposed changes in the policy and was in the process of reviewing the conditions.

PIL questions gold schemes by jewellery firms (Legal)

A public interest litigation (PIL) filed before the Nagpur bench of the Bombay high court questions the legality of gold purchase plans being offered by leading jewellers to attract customers, likening them to deposit-taking schemes that have no accountability. The petition filed by Nagpur-based activist Sandeep Badriprasad Agrawal names popular gold-saving schemes such as Golden Harvest being offered by Tanishq, Kalpavruksha Plan-Super byTribhovandas Bhimji Zaveri Ltd, Gold and Diamond scheme by Gitanjali Group and Jewels for Less by PC Jeweller Ltd and alleges that such offers are illegal. The petition was filed in April and has been heard twice since then.The next hearing is due in September.

The petition has made the Securities and Exchange Board of India (Sebi), Reserve Bank of India (RBI), the commissioner of Nagpur police and Union of India parties to the case. Typically, a gold saving scheme collects monthly instalments from customers for at least 11 months, after which the investor gets some benefits (concessions or discounts) on the principal, which can be redeemed against gold jewellery sold by the firm in the 12th month. For instance, the Golden Harvest scheme by Tanishq, a unit of Tata group Titan Industries Ltd, which has at least 1.5 million customers, requires the customer to pay advance instalments for 11 months. The 12th month instalment is paid by Tanishq and the accumulated amount can be redeemed against gold jewellery by the customer. The minimum monthly instalment amount for Golden Harvest is Rs.500. The PIL contends that the schemes involve collection of money from the public at large and that there is no control over such schemes and no accountability in case the scheme ends in failure. According to Sebi, any scheme offered by a company under which the contributions made by investors are pooled and managed on their behalf with a profit motive is a collective investment scheme (CIS). At present, CISs are regulated by Sebi while RBI regulates non-banking finance companies and the state governments oversee chit funds. The PIL has sought an enquiry into gold saving schemes, alleging that they are no different from deposittaking schemes. The PIL also alleges that there is no mechanism (to recover money) if any jewellery shop owner or company has gone into liquidation and such schemes need to be banned. While RBI, Sebi and the police have responded to an earlier Right to Information (RTI) application filed by Agrawal stating that the schemes do not fall under their purview, the PIL has sought a fresh enquiry into the schemes by the regulators. RBI has, however, maintained that since Tanishq and similar jewellery firms are not registered with it as non-banking finance companies, the schemes do not fall under its purview. The banking regulator clarified that schemes like Golden Harvest do not amount to acceptance of deposits.

We coined a new word 'Unformal' to grab attention: Anand Parekh, Vimal (Social)
Vimal, the textile brand of Reliance Industries, will declare the end of ties and "stereotypical formals" with the launch of a new range called Unformals on Friday. Unformal, a new word the company has coined, stands for 'unusual formal', says Anand Parekh, president of Reliance's textile division. It is targeted at people, particularly youth, who want to be a little easy without disrespecting the formal setup, Parekh told ET in an interview. Excerpts: The new campaign, 'Be Unformals' reaches out to a different category of consumer altogether through four groups of products, namely, fashion jacketing, fashion cottons, fashion and feel and fashion ceremonials. Fashion jacketing would offer jacketing fabric beyond blues and grays and would have a wide spectrum of colours and designs.

We had been exporting similar fabrics to the US, Western Europe and Japan and would now introduce this in India. Fashion cottons is more about offering comfort of cotton in formal wear. This would be the first time that we would introduce fabrics with 80% cotton component for comfort. Fashion and feel is a technology product. While the fabric would look woollen, there would not be any wool in it. This would be cool and comfortable and could be used for trousers or jackets. With fashion ceremonials, we would address the need of Indians to have comfortable yet stylish ethnic wear. This fabric would do away with the fabrics that are not worthy of skin-touch and could be used to make jodhpuris or achkans.

New Windows 8 payments solution (Technological)

Seamlesss mobile payments solution SEQR is to be launched for both Windows 8and Windows Phone and integrated with Windows Phone Wallet. According to the company, the integration with Windows Phone Wallet opens up new opportunities not only for payments but also for value-adding services such as offers, loyalty programmes, purchase history and integration with the stores own apps. SEQR meets our high level of ambition regarding simplicity, user-friendliness and security Urban Falk, Microsoft Offering this solution via tablets and telephones with Microsoft technology is completely in line with our ambition to extend SEQR Mobile Payment to as many users as possible, and to establish it as one of the global standards for mobile payments, said Peter Fredell, CEO and president of Seamless. "Our assessment is that Windows platforms for apps will grow in line with increases in market share. Supporting the platform and Windows Phone Wallet will enable us to reach a larger customer base, he added. SEQR meets our high level of ambition regarding simplicity, user-friendliness and security, said Urban Falk, business development manager at Microsoft Sweden. The mobile payments solution will be implemented in Microsofts Windows Store and Windows Phone Store in all Seamless markets in 2013.