Zomato’s shares soar as company initiates liquidation of Portugal-based subsidiary

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July 24, 2023

Zomato Limited saw a 1.12 percent increase in the morning trade on July 24. The surge came after the renowned food delivery platform disclosed its decision to commence the liquidation process for its wholly-owned subsidiary based in Portugal.

In an after-market-hour filing on July 21, Zomato Limited stated that Zomato Media Portugal, its subsidiary, was not considered a material component. Consequently, the liquidation of this subsidiary would have no impact on the turnover or revenue of the food aggregator. Despite this disclosure, the company did not provide a specific reason for the decision to liquidate the subsidiary, which currently remains inactive in terms of business operations.

As of 10:02 am, Zomato’s shares were trading at INR 81.60 on the National Stock Exchange, exhibiting a 1.62 percent increase from the previous day’s closing price. Notably, the company’s shares have witnessed a substantial 33 percent gain since the beginning of the year.

Starting from January 1, Zomato has taken steps to commence liquidation proceedings for five of its subsidiaries and also de-registered one subsidiary. These subsidiaries were located in Indonesia, New Zealand, Australia, Jordan, and Portugal. Despite these actions, Zomato Limited has reassured that its revenue and turnover will remain unaffected by the liquidation process.

According to brokerage firm Motilal Oswal, they have assigned a “buy” rating to the stock with a target price of INR 80, indicating a potential upside of 24 percent for the stock.

“With dominant market share and strong growth in the food delivery business and Hyperpure, we expect Zomato to report a strong 36 percent revenue CAGR over FY23-25,” said Motilal Oswal in a May 22 report.

Hyperpure functions as a B2B platform specialized in providing kitchen supplies to hotels, restaurants, and catering businesses.

In FY23, Zomato experienced a significant 65 percent surge in revenue, reaching INR 7760 crore. However, the food aggregator managed to narrow its net loss by 19 percent compared to the previous year, bringing it down to INR 971 crore. During the same period, the Earnings Before Income Tax Depreciation and Amortisation witnessed a decline of 2212 basis points, settling at 6.81 percent.

India’s rice export ban triggers panic buying among NRIs in the US

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July 24, 2023

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The recent prohibition on rice exports by India has triggered a significant increase in the cost of this essential commodity, causing apprehension among Non-Resident Indians (NRIs) residing in the United States (US). Consequently, numerous NRIs are now opting to purchase numerous rice bags from their local grocery stores in anticipation of a potential scarcity and subsequent rise in prices.

The ban’s repercussions are reverberating through the substantial NRI community in the US. Concerns about rice availability and pricing have prompted a surge in demand as NRIs rush to secure this crucial commodity. Local grocery stores have witnessed a notable upswing in rice bag sales, with some customers opting to buy in bulk to prepare for potential uncertainties.

According to a report by The Times of India, the rice ban has sparked panic buying among the Telugu population in North America, Europe, and West Asia, driven by concerns over potential rice shortages. As a consequence, Indian grocery stores in these regions are witnessing long queues of customers. The report also mentioned that a 9kg bag of rice is currently being sold at $27.

Major cities like Texas, Michigan, and New Jersey have experienced instances of panic buying. In response to the increased demand and concerns over rice scarcity, certain stores in these cities have implemented sales limits, allowing customers to purchase only one rice bag each.

In response to multi-year high domestic prices caused by unpredictable weather conditions jeopardizing rice production, India, the world’s leading rice exporter, has recently taken the measure of banning all exports of non-basmati white rice. While this decision aimed to stabilize prices within the country, it has had ripple effects on the global rice market and triggered concerns about potential inflationary pressures.

Being a staple food for over 3 billion people globally, rice holds immense importance, especially in Asia, where nearly 90 per cent of its water-intensive cultivation takes place. However, the recent export ban imposed by India, a major player responsible for 40 per cent of the world’s rice exports, has had a significant impact on the global supply chain. The Asian rice trade has temporarily halted as traders assess the implications of this ban, with predictions of substantial price increases in the near future.

Indian whiskey stays on top despite rising wine and gin consumption

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July 24, 2023

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whisky under 8000 — (Representative Image)

In spite of the growing popularity of wine and gin consumption in recent times, whiskey continues to reign supreme in the Indian liquor market, particularly in the affordable under INR 750 per bottle segment.

According to the most recent data from the global agency IWSR, whiskey dominates nearly two-thirds of spirits sales in India. Among the various whiskey brands, a staggering 85% of the market share is currently held by 10 domestic brands, which primarily operate in the lower price range.

Currently, imported whiskey accounts for approximately 3.3% of the total whiskey market share in India. Projections indicate that this share is expected to increase to 3.7% by the year 2027. Despite this growth, the data highlights that Indian-made whiskey will continue to dominate the market, with a substantial hold of over 96%, even after an estimated 3.8% growth over the next five years.

The most recent figures demonstrate a remarkable recovery for the business, as it successfully rebounded from the impact of the Covid-19 pandemic. Notably, Vodka has experienced a robust resurgence with a remarkable 34% increase in sales. This impressive growth can be attributed to the popularity of flavored varieties, which have been a significant driving force behind the surge in demand.

India ranks as the fifth largest market globally for alcoholic beverages, with an estimated total worth of approximately $53 billion. Over the coming five years, domestic consumption is anticipated to play a significant role in driving the industry’s growth. Among the various segments, ready-to-drink beverages have emerged as the fastest-growing category, experiencing an impressive surge of nearly 40% in the previous year. Projections indicate that this segment will continue to expand at double-digit rates over the next five years.

The wine segment is expected to be the second fastest-growing category, with a projected growth rate of 6.6%. It is worth noting that nearly one-fifth of the wine consumed in India comes from imports. Following wine, spirits are anticipated to grow at a rate of 3.7%, while beer is expected to experience growth at a rate of 2.7%, according to data from IWSR.

Although specific figures are not currently available, it is expected that imported wine from countries like Australia and the European Union might gain a larger market share due to the existing free trade agreements. Conversely, in the whiskey sector, where the UK is actively pursuing tariff reductions, the domestic industry is expected to play a crucial role in driving growth.

This is despite some of the imported whiskeys seeing a rapid rise, although it has come over a small base.

“There is a growing trend of new whiskeys being explored by Indian consumers. While scotch leads, the new players on the table are Irish, US, Japanese and Canadian whiskies. And of course, Indian Single Malts too,” said Nita Kapoor, CEO, International Spirits & Wines Association of India.

Coffee Day Global enters bankruptcy proceedings following NCLT’s decision

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July 24, 2023

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According to sources familiar with the matter, Coffee Day Global, the company behind the Cafe Coffee Day chain in India, has been granted corporate insolvency by the Bengaluru bench of the bankruptcy court. The National Company Law Tribunal (NCLT) issued an oral order last week, accepting the petition filed by IndusInd Bank and admitting the unlisted company for corporate insolvency proceedings.

The tribunal has not yet uploaded a comprehensive order as of now.

Coffee Day Global, a subsidiary of the publicly listed Coffee Day Enterprises, was established by the late VG Siddhartha. His tragic demise by suicide in 2019 sent shockwaves through the business community, leaving many in disbelief.

As of March 31, 2022, based on the most recent annual report, the company possesses a noteworthy debt of INR 67.3 crore owed to IndusInd Bank. According to an individual familiar with the matter, the company’s admission to the tribunal occurred when attempts to reach a one-time settlement agreement between the company and IndusInd Bank failed. Despite attempts to seek clarification, Coffee Day Group remained unresponsive to comment requests.

According to information available on the NCLT website, it was observed that IndusInd Bank had engaged Skanda Legal as their legal representation, while Coffee Day Global had enlisted Tatva Legal as their counsels.

As per the FY22 annual report of Coffee Day Global, an unlisted entity, it possesses 495 Cafe Coffee Day outlets spread across 158 cities and operates 285 CCD Value Express kiosks. Furthermore, the company has successfully installed 38,810 coffee vending machines in various corporate workplaces and hotels, according to the same report.

As of March 2022, the company carries a total debt of INR 960 crore, comprising bank loans and inter-corporate deposits amounting to INR 119 crore owed to Tanglin Development, a group entity.

Shilpa Shetty-backed Kisankonnect launches India’s first digital farmers market for urban consumers in Mumbai and Pune

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July 24, 2023

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Kisankonnect, a fully integrated ‘farm-to-fork’ company, has taken a significant step towards bridging the gap between farmers and consumers by introducing ‘Aapka Apna Farmers Market’ on its innovative app. The driving force behind this transformative initiative was none other than Shilpa Shetty Kundra, a devoted practitioner of wellness, who sought to connect 5,000 farmers from Maharashtra directly with the discerning consumers of Mumbai and Pune.

Kisankonnect, a three-year-old start-up, has successfully developed an advanced, technology-enabled supply chain for fresh agricultural produce, catering to over 3 Lac urban consumers through its innovative App and Farm Stores. The company prides itself on adopting ‘Responsible Agriculture Practices,’ which encompass soil improvement techniques, the use of eco-friendly bio-fertilizers instead of harmful chemicals, and providing farmers with scientific agronomy inputs to optimize crop growth. Notably, Shilpa Shetty-Kundra has recently made an investment in this promising start-up.

Vivek Nirmal, Founder and CEO of Kisankonnect said, “Eliminating middle-man has helped us to reduce wastages and offer fair price to the farmers, as well as, the consumers. At Kisankonnect, we have passion to work with our soil, our farmers and produce safe fruits and vegetables for our loyal consumers. We have built traceability for the vegetables we source for our consumers using our proprietary tech’ Kisan-Trace’, which gives full information of the farm, farming practices and its growing location to our consumers on the App, even before buying the same. Farmers have seen better productivity through scientific interventions through our Agri-Clinics”.

Co-founder and Chief Business Officer Nidhi Nirmal of Kisankonnect added, “In today’s world, consumers have become highly conscious of what they consume. Knowing the farmer from which the food comes directly is matter of great confidence about quality of the produce. As a mother, it is important for me whether what I’m buying for my family are leafy vegetables grown on sewage water near railway tracks, or I’m getting it from a known source, who ensures the produce is harvested from healthy plants.”

“Shilpa Shetty Kundra also expressed concern about trusting the source and nutrition of vegetables in our daily diet. The partnership aims to connect responsible farmers practicing ethical farming with conscious consumers in Mumbai and Pune. These consumers care about what they consume and want the produce conveniently delivered directly from the farm to their homes. We see our customers love and trust Kisankonnect and prefer buying more from our farmers,” she added.

United Spirits reacts to tax hike with 14-17% surge in liquor prices in Karnataka

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July 24, 2023

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United Spirits, the largest liquor company in the country, has announced that the prices of its brands will witness a surge of 14-17% in Karnataka. This decision comes in response to the state government’s recent announcement to impose a 20% hike in additional excise duty (AED) on Indian-made liquor (IML) starting from August.

Despite having the highest tax rate on liquor in the country, Karnataka remains the largest alcohol-consuming state in India, accounting for 18% of the nation’s total sales with an impressive annual sales figure of 68.4 million cases.

“This was not a welcome tax increase. The tax rates in Karnataka are already much higher. A 20% tax increase, in effect means that MRP of our brands will likely go up in the range of 14 to 17%. So, they become even more expensive in the state than they were already,” Hina Nagarajan, managing director at USL, told investors. “It’s too early to call out the impact on demand but our experience suggests there is generally a negative impact when prices go up.”

During the past few quarters, there has been a challenging situation for mass-priced segments, mainly due to inflation, even with a notable consumer shift towards premium products. For USL (United Spirits Limited), the popular segment experienced a 12% decline in volume growth. However, despite this, the company managed to achieve an overall 6% volume expansion.

In India, the liquor industry faces the influence of several state governments, which either control liquor retailing or wholesale distribution, or sometimes both. Taxes play a significant role in contributing to the state and central government revenues. Approximately more than 50% of the retail price of liquor goes towards VAT (Value Added Tax) and excise duty. For instance, the excise revenue generated from liquor sales in Karnataka reached around INR 30,000 crore in the fiscal year 2022-23.

FSSAI ramps up efforts: Stricter rules in the works to combat food adulteration

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July 24, 2023

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According to officials familiar with the matter, India’s food regulatory authority is gearing up to take strong action against adulterators. As the consumption of processed food rises in people’s diets, the regulator is planning to enhance regulations and increase awareness to tackle this issue effectively.

“Eating habits have changed over the years. Several new food items and additives have been introduced and there are newer technologies in the food industry, all of which call for updating our regulatory requirements,” a government official said, requesting anonymity.

Lately, the Food Safety and Standards Authority of India (FSSAI) has been carrying out unannounced inspections nationwide, aiming to tackle the issue of food adulteration.

“There was a food regulators summit held recently that was another step in this direction, meant to look for ways in which regulators can act to make the whole food safety ecosystem better,” the official said.

The FSSAI hosted a two-day Global Food Regulators Summit 2023 in the national capital, marking a significant milestone for India. This momentous event focused on addressing global food safety challenges and exploring regulatory frameworks. Suman Berry, the vice-chairman at NITI Aayog, the government’s think tank, emphasized the summit’s pivotal role in fostering international cooperation to ensure food safety on a global scale.

“Adulteration of food is a serious problem affecting the fabric of society, and the complexity of India’s food landscape poses significant challenges which needs to be addressed,” Berry said. “Collaborative work between the government, industries and other stakeholders are crucial to realize this endeavour. There is also a need for empowering consumers through awareness campaigns and promoting safe hygiene practices to reduce the risk of food- borne illness.”

The regulator has recently introduced a new initiative known as the Indian Food-o-Copoeia, modeled after the Indian pharmacopoeia. Similar to the pharmacopoeia, which encompasses details about all drugs and their formulations manufactured, imported, and distributed in the nation, the Food-o-Copoeia will contain comprehensive information regarding all food and related products produced, imported, and sold in India.

“It is a collection of all food safety and standards regulations for each food category as a monograph. The document is uploaded on the website for everyone to access. This will be of great use to the industry but common people would also be able to access it,” said G Kamala Vardhana Rao, chief executive officer at FSSAI. “Our teams have been working for the past six months to collate relevant data and put together this document.”

The document shall undergo regular updates, ensuring the provision of current information about food items.

In addition to the Food-o-Copoeia, the regulatory body has introduced both a common digital dashboard and food authority directories. The common digital dashboard serves as an integrated IT portal, offering a centralized registry of food-related regulations and standards pertaining to food products and services across the nation.

The overarching objective is to foster collaboration among regulators, with a focus on enhancing food safety systems and regulatory frameworks.

“Considering the evolving landscape of emerging food hazards, new technologies and changing consumer needs, the aim is to develop a cohesive approach on food safety policy frameworks,” said Rao.

The regulator also is focusing on other critical areas such as antimicrobial resistance; animal feed and nutrition on safety and its impact on the food chain; and innovation in food emergency response, recall and analysis.

“As different geographical regions are characterised by agro-climatic diversities, no one standard could be applicable to food safety protocols,” health minister Mansukh Mandaviya said at the inaugural session of the summit. “We need to explore how regional diversities can be factored into global best practices.”

Social media influencer Revant Himatsingka calls bread consumption a ‘big joke’ in India

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July 24, 2023

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Revant Himatsingka, known as Food Pharma in the social media sphere, gained prominence for shedding light on the elevated sugar content in Bournvita, leading to Cadbury serving him with a legal notice. Now, he has redirected his attention towards exploring the veracity of the claim that brown and multigrain bread truly offer a healthier alternative to conventional white bread.

“Bread in India is a big joke!” Himatsingka said. “There are two types of bread in India. One which is openly unhealthy (white bread), and the second type (brown, multigrain, wholewheat) which pretend to be healthy when they are not!”

In a tweet, Himatsingka pointed out that bread consumption has experienced a notable surge in recent decades, exacerbating the issues associated with its consumption.

“Till a few decades ago, bread wasn’t as common in India. But now it is commonly used by Indians for breakfast sandwiches, school tiffins, and snacks!” the Food Pharma tweeted. “If you have 2 slices of bread a day, you have more than 700 slices in a year. Make sure you pick the right one!”

Explaining white bread is made up of maida or refined flour which has very little nutritional value, he said, “The maida is created by polishing the wheat which removes its layers of fiber.”

Bread in India is a big joke! There are two types of bread in India. One which is openly unhealthy (white bread), and the second type (brown, multigrain, wholewheat) which pretend to be healthy when they are not!

Till a few decades ago, bread wasn't as common in India. But now… pic.twitter.com/8yOQsG7jKn
— Revant Himatsingka “Food Pharmer” (@thefoodpharmer) July 22, 2023

“Brown bread in India is also not healthy,” Himatsingka said in his video showing how the brown colour of the bread is achieved through colour and not because it is made up of wheat flour. “They are brown because of a caramel colour 150A. This caramel colour is similar to the colour in Coca Cola and Bournvita.”

Referring to the third type, which is multigrain bread, the food influencer remarked that it also didn’t consist solely of wheat flour.

“According to FSSAI, ingredients are listed in order of weight. Most whole-wheat breads have maida as the first ingredient and use very less whole wheat.” He then pointed out that a particular variety of whole-wheat bread had only 20 percent whole wheat.

“They just add a little bit of whole wheat so they can call themselves whole wheat bread,” Revant Himatsingka said. “Multigrain bread also does not mean it’s healthy. It just means that it has more than one grain. Most multigrain breads in India are also mainly made up of maida,” he added pointing to a particular brand of bread that has more maida than wheat flour since the refined flour was mentioned first in its list of ingredients.

Advising people to opt for wheat flour rotis instead of bread, the Food Pharmer added that if people still want to continue eating processed bread, they should check the ingredients listed on the packet and avoid varieties that have maida, palm oil and preservatives such as those available from local bakers.

Jumbotail extends full cooperation to Adani Wilmar amid counterfeit product allegations: Promises assistance in FIR investigation

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July 24, 2023

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Fortune 1 — Fortune (Representative Image)

Jumbotail, the B2B e-commerce company, announced on Sunday that it is providing full support to identify the vendors responsible for shipping counterfeit Fortune brand oil products to its warehouse.

Edible oil major Adani Wilmar has lodged a police complaint against Nexus Venture and Kalakar Capital-backed Jumbotail for allegedly distributing counterfeit products in the name of its “Fortune” brand.

A Jumbotail spokesperson said that Adani Wilmar contacted the company about certain alleged counterfeited products.

“As soon as we received their communication we checked our systems and proactively shared the details of stock available in one of our locations. Based on our information they visited our location to inspect the stocks. We continue to offer all assistance to the Adani team to identify the original source of the vendors from whom the products were procure,” the spokesperson said.

Adani Wilmar on Saturday said that it lodged an FIR through their agency against Jumbotail Pvt Ltd reporting the distribution of counterfeit products on the latter’s platform.

Acting upon this complaint, the law enforcement authorities immediately conducted a raid at Jumbotail’s warehouse, wherein alarming quantities of counterfeit products bearing the ‘Fortune’ brand name, the flagship brand of Adani Wilmar were seized.

The seized products included 126 pet bottles of Fortune Kacchi Ghani Mustard Oil (1-litre pack), 37 fake Fortune Refined Soybean Oil (1-litre pouches), and 16 pet bottles of Mustard Oil (1-litre pack) without the lid, Adani Wilmar had said.

The Jumbotail spokesperson said that it has a zero-tolerance policy towards counterfeit products and it takes strict measures to ensure only original products are sold through its platform.

“We will continue to provide all necessary assistance to Adani Wilmar and the law enforcement authorities to trace the original source of the said alleged counterfeit products,” the spokesperson said.

Adani Wilmar files FIR against B2B platform for counterfeit ‘Fortune’ brand products

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July 24, 2023

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Adani Wilmar Ltd, a prominent edible oil company, has taken action against a B2B platform for purportedly distributing counterfeit products under its renowned ‘Fortune’ brand. Following a regular market survey, Adani Wilmar representatives unveiled the deceptive practices and subsequently lodged a formal police complaint.

In a statement, the company said it has lodged an FIR through their agency, against the B2B platform for alleged distribution of counterfeit products on the platform.

The FIR has been lodged at Badalpur police station in Gautam Budhnagar District, Uttar Pradesh.

Adani Wilmar said the law enforcement authorities conducted a raid at the warehouse of B2B (business to business) platform “wherein alarming quantities of counterfeit products bearing the ‘Fortune’ brand name, the flagship brand of Adani Wilmar were seized.”

The seized products included 126 pet bottles of Fortune Kacchi Ghani Mustard Oil (1 litre pack) without the lid, 37 fake Fortune Refined Soybean Oil (1 litre pouches), and 16 pet bottles of Fortune Sarso Oil (1 litre packs).

“We are deeply concerned about counterfeit products circulating in the market and posing risks to consumers’ health,” an Adani Wilmar spokesperson said.

Taking this matter seriously, the spokesperson said the company is collaborating with authorities to swiftly identify sources of counterfeits, and take decisive actions against unscrupulous traders.

According to the statement, the company initiated an in-depth examination of the reported product, which revealed significant mismatches in Batch Code details, fake QR codes, and different packaging materials, confirming the presence of counterfeit products.

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