BANGALORE | 18 PAGES | .̀ 3.50 ONLY FRIDAY, 28 FEBRUARY 2014

Airtel Not Planning AnyBuyouts in India: VittalBUSINESS OF BRANDS��5

An Unusual Week in theLife of Elon MuskWORLD VIEW��15

Mid-term Funds a BetterBet Amid High YieldsMARKETS+FINANCE ��11

BENNETT, COLEMAN & CO. LTD.

THE ECONOMIC TIMESWWW.ECONOMICTIMES.COM

OUR BUREAUSBANGALORE | NEW DELHI

EBay has acquired anotherlarge slice of India’s second-largest online retailer, a pre-

cursor many believe to a full pur-chase of the Delhi-based Snapdeal.

By leading an investment of$133.77 million (about .̀ 830 crore),the US-based company is bettingthat the fast-growing Snapdeal willhelp it compete against the likes ofFlipkart and Amazon in one of thefastest-growing markets for ecom-merce in the world.

People familiar with the negotia-tions said the investment valuesSnapdeal at $650-750 million (about.̀ 4,000-4,700 crore). eBay is estimat-ed to own between 35% and 40% of

the company, and founders KunalBahl and Rohit Bansal under 20%together. eBay and Snapdeal de-clined to divulge financial details.

Jay Lee, senior vice-president andmanaging director for Asia-Pacificat eBay, said accelerating growth inIndia and other emerging marketsis a core strategy for the company.“We continue to invest in Snapdealdue to its complementary businessmodel, good management team andstrong brand,” he said.

The eBay-led investment is the lat-est transaction in India’s boomingonline retail sector, which is esti-mated to grow in size to $56 billion(almost .̀ 3.5 lakh crore) in 2023 from$2 billion (.̀ 12,400 crore) now. Lessthan a month ago, fashion portalMyntra raised $50 million (.̀ 310

crore) from the Azim Premji familyoffice and other investors. In Octo-ber last year, Flipkart, founded bySachin Bansal and Binny Bansal,completed an investment round of$360 million (.̀ 2,200 crore), whichvalued the Bangalore-based frm at$1.6 billion (over .̀ 9,900 crore).

eBay, which is a distant second toAmazon in its home market of US,is expected to start the process ofconsolidating its ownership ofSnapdeal within a couple ofmonths, said people with knowl-edge of the discussions.“It will take12-18 months for the process to becompleted as they will need to buyout shares of numerous investors,”said the person.

eBay Snaps Up Another Chunk of SnapdealLeads .̀ 830-cr funding into ecommerce company; Buyout maybe on cards

Snapdeal Raised .̀ 50m Last Year��8

Learn to Take onGlobal Challenges,Modi Tells TradersGives business a

reformist message;

says govt must form

strategies for each

state separately

they fear loss of revenues if theexisting levies were replaced.

With the general elections fastapproaching, Modi also laid outhis economic views separatelyat a conference on the Indianeconomy later in the day.“Speedy, yet sustainable, eco-nomic growth that is inclusiveof all is the need of the hour,” hetold a crowd of businessmen,bankers, economists and diplo-mats.

As India is vast, he said thereare no tailor-made solutions forthe problems of the entire coun-

try. “The govern-ment must identi-fy the strengths ofeach state and de-vise strategies ac-cordingly,” he

said in an hour-long speech. Butfor that the prime minister andchief ministers must act as ateam. “This is not rocket sci-ence. The harmony is missingin decisions.”

Modi also revealed his plans toaccommodate women in boost-ing growth. “Women form 50%of the population, but they as-sume that they have no role incontributing to GDP growth.”The truth is they play a hugerole, be it in animal husbandry,healthcare or handicrafts.

Modi spoke in Hindi, whichdisappointed at least a few for-eign nationals — people from 25countries attended the meeting,according to organisers of theevent — in the audience.

OUR BUREAUNEW DELHI

Narendra Modi, the BJP’s can-didate for prime minister, saidon Thursday India’s traders andgrocery store owners mustlearn to compete with largemodern stores and online retail-ers, comments that could signalachange in a key economic prin-ciple of the party.

The BJP had opposed the gov-ernment’s decision in late 2012to allow foreign supermarketsto open in India due to the threatit says the move poses to mil-lions of kirana store ownersand small traders who form thecrux of the party’s support.

In a separate speech, Modi laidout a reformist agenda andpromised policy implementa-tion to an audience comprisinginvestors, businessmen andeconomists. But Modi stoppedshort of commenting on wheth-er he supports or opposes for-eign investment in retail. “Weshould not worry about the chal-lenges from global trade,” hetold a gathering of the Confeder-ation of All India Traders. Rath-er, he said, small traders shouldemphasise on quality of theirproducts to compete better andcould enter into contracts withbig online retailers to create“virtual malls in small shops”.

Earlier this month, the newly-elected BJP government of Ra-jasthan rolled back the decisionto allow foreign investment inretail. More than half of the 28state governments are againstthe policy.

Modi, the chief minister ofGujarat, said he also favouredintroducing a nationwide goodsand services tax (GST), a long-pending reform expected tobring a uniform market, reducecosts of businesses and in-crease government revenue.

Many states, including BJP-ruled ones, have resisted GST as

Subrata Roy Missing from Mother’s

Bedside When Police Called on HimSahara India chief Subrata Roy, who claimed ex-

emption from appearing before SC to attend to

his mother, was missing from her bedside when

the police came knocking on Thursday.

Companies��7

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

IT Firms Seek Design School Talentfor New Verticals Like Cloud

IT firms are making a beeline to design schools

as the focus verticals such as product design and

emerging technologies like mobile and cloud

gather traction in India.

Career & Business Life ��10

llllllllllllllllllllllllllllllllllllllllllllllllllllllllllllllll

BPCL Raises 175 Million SwissFrancs Via Offshore Bonds

BPCL has raised around 175 million Swiss francs

by selling offshore bonds bearing a coupon rate

of 2.988% and maturing in December 2019.

Markets + Finance��11

Inside story

VISHAL DUTTAAHMEDABAD

For any pedigreed company or in-dividual donors looking to gettheir names on a building at the

Indian Institute of Management inAhmedabad (IIM-A), the country’stop-ranked business school, now’sthe time to do so. Naming rights forvarious buildings on the campus areon offer, as the institute tries to em-ulate a fund-raising method that’swell established overseas.

Back home, the Indian Institutes ofTechnology and the Indian School ofBusiness are among educational es-

tablishments that use this method todrum up contributions.

“Yes, we are in the process of imple-menting infrastructure namingrights,” said IIM-A director AshishNanda, a Harvard Law School profes-sor who was appointed last year aftera global hunt that took nearly 10months.

He said that Arvind Sahay, a profes-sor at the school, was heading the pro-ject.

Big education institutions such asHarvard Business School receive asubstantial portion of their revenuefrom naming rights.

“If we can have a large corpus, then

this may also result in the decrease ofstudent fees,” said an official associ-ated with the plan. IIM-A rights willbe awarded for a fixed tenure and theterms will vary.

Amongst IIMs, the Ahmedabadschool will be the first to give outnaming rights in an organised for-mat, said the person.

Harvard Business School’s 2013 an-nual report showed revenue of $587million, of which 31% came frompublishing, 25% from executive edu-cation tuition, 18% from MBA tuitionand fees, 2% from housing, rents andothers and 24% from endowment dis-tribution and gifts.

All are Welcome at IIM-A Naming Ceremony Following global cues, premier business school offers building naming rights in order to drum up funds

CR SUKUMAR & SABARINATH MHYDERABAD | MUMBAI

Hyderabad-based infrastructure com-pany Ramky Infrastructure is in nego-tiations with private equity fund Mor-gan Stanley Infrastructure Partnersand the structured investment group ofthe Ajay Piramal group to sell three ofits road assets to raise funds and cutdebts. The company plans to raise .̀ 900crore from the sale of assets. These as-sets include Ramky Elsamex, SehoreKosmi Tollways and NAM Expressway.

The infrastructure company has ap-pointed ICICI Securities as the invest-ment banker for the transaction.

“Ramky Infrastructure is at an ad-vanced stage of discussions with the in-vestors for selling three road assets.The due diligence process has alreadystarted and the company expects to con-clude the deal with the investors overthe next couple of months. IL&FS hasagreed to sell its 50% stake in NAM Ex-pressway,” said a person with directknowledge of the deal.

Other infrastructure sector investorssuch as IDFC Alternatives have alsobeen approached. Potential investorshave recently undertaken due diligence

of the NAM Expressway project in Hyd-erabad. While Ramky Infra and Ajay Pi-ramal group declined to comment, ICI-CI Securities and Morgan Stanley wereunavailable for comments.

Ramky Infra Looks toSell Three Road Assets

WAR OF WORDS RIL issues strong denial as AAP claims UPA turned blind eye to report from

Indian diplomats about non-descript Singapore firm transferring cash to Ambani cos

case earlier this month allegingthat gas prices are being raisedbecause of crony capitalism in-volving Ambani, oil minister Vee-rappa Moily and other politic-ians. AAP kept up its attack on

ernment saying that BiometrixMarketing, which operates fromjust one room that is mostlyclosed, had invested Rs 6,350 crorein India. Nearly half the amountwent to RGTIL, about Rs 1,850crore to Reliance Ports and the re-maining Rs 200 crore to RelianceUtilities Ltd, according to thecopy of the diplomatic corre-spondence distributed by AAP.

“Thus it is absolutely clear thatReliance is laundering its ill-got-ten profits in India through Sin-gapore (particularly from KG ba-sin gas) and depositing the sameinto accounts of Mr Mukesh Am-bani. Yet this UPA governmenthas not even bothered to investi-gate this and arrest Mr Ambani,and has instead showered himwith one benefit after another,”AAP said.

Reliance vehemently deniedthis.

“The allegations that ill-gottenlaundered money or profits haveeither been made or that thesehave been deposited in the ac-counts of Mr Mukesh Ambanithrough Singapore or otherwiseare false and are treated by uswith the contempt that they de-serve,” the company said.

Reliance with a statement thatsaid: “UPA showers benefits toReliance: one after the other.”

Bhushan distributed copies of anote from the Indian High Com-mission in August 2011 to the gov-

OUR BUREAUNEW DELHI

Arvind Kejriwal’s Aam AadmiParty intensified its attack onMukesh Ambani, accusing himof being involved in a Rs 6,530-crore money-laundering oper-ation that deserved investigationand arrest of India’s richest man,provoking a fierce denial fromReliance Industries, the first timeit has reacted so strongly to thebarrage of allegations levelledagainst the company and itschairman.

Aam Aadmi Party leader Prash-an Bhushan issued a statementsaying the United Progressive Al-liance government had turned ablind eye to commercial intelli-gence from Indian diplomats inSingapore seeking the investiga-tion of a company with practical-ly no income transferring largesums of money to firms such asReliance Gas Transportation In-frastructure Ltd (RGTIL) con-trolled by the Ambani family.

Reliance said in an emailedstatement it was the victim of an“orchestrated, politically moti-vated campaign”.

AAP, during its 49-day Delhistate government term, had or-dered the filing of a corruption

Now, AAP Accuses RILof Money Laundering

BJP’S RETAIL RETHINK?

Kunal Bahl and Rohit Ban-

sal have managed to posi-

tion Snapdeal as the big-

gest rival to Flipkart.

Meanwhile, Bahl still finds

time to send out irreverent

tweets, reports Biswarup

Gooptu.��5

Kunal Bahl: An IrreverentBusinessman

Jabong

$100m

$150-200m

2014

Rocket Internet, CDC, European Founders Fund

Myntra

$50m

OVER $200m

2014Premji Invest, So� na, Tiger Global, Accel Partners, IDG Ventures, Kalaari Capital

Sale @ E-tailersTop Investments in Online Retail

Flipkart

$360m

$1.6billion

2013 Naspers, Tiger Global, Dragoneer, Morgan Stanley, So� na, Vulcan Capital, Accel Partners, Iconiq Capital

Snapdeal

$133.8m

$650-750m

2014 eBay Inc, Nexus, Kalaari Capital, Bessemer, Intel Capital, Saama Capital, Recruit Holdings, ru-Net

Amt. Raised Valuation Est. Investors

We should not worryabout the challengesfrom global trade

NARENDRA MODI

Do pre-elections opinion polls sway voters?

www.economictimes.com

Will recent developments hurt privateinvestment in oil & gas?

TODAY’S QUESTION

18%YES

76%NO

6%CAN’T SAY

Congress V-P Rahul

Gandhi is likely to

carry out ‘padayatra’

in select parts of the

country, highlighting

the theme—“economic progress with

social harmony”—in the run-up to the

Lok Sabha polls, reports Our Political

Bureau.��3

Rahul PlansPadayatra

On Edit Page

Low Growth in FY15A patchwork of pushy policies can

take economic growth only as far as

5.5% in the next financial year, says

Bibek Debroy.

Sharp political reportage

from election hotspots

around India. A continuing

series, today's focus is on IT capital

Bangalore's constituencies. Is Nileka-

ni a game changer? �� 4

ET@Ground ZeroINCLUSIVEGROWTH��SEE EDIT

The ProposalCORPORATES OR individual donors may be allowed to acquire ‘naming rights’ for various infrastructure at IIM-A campus

The InfrastructureRIGHTS MAY be allowed for dorms, classrooms, seminar rooms, faculty room, cricket ground

What’s in a Name

Today’s edition carries CORPORATEDOSSIER (metro only)

Manipal Health

is close to buy-

ing a hospital

each in Mumbai and Delhi

as part of its expansion

plan in the coming six

months. The deals will be

finalised before May, re-

ports Varun Sood from

Bangalore. Manipal

Health has drawn an out-

lay of .̀ 1,200 crore as it

closes on its buyout of an

existing 250-300 bed

hospital each in Mumbai

and Delhi, and build four

news hospitals, starting

August. Two 300-bed

hospitals will be set up in

Whitefield, Bangalore,

while the group will make

one new hospital in Delhi

and Mumbai.��6

Manipal toBuy TwoHospitals

One For The Road

Assets up for sale are Ramky Elsamex, Sehore Kosmi Toll-ways and NAM Expressway

These assets have already started generating revenues

Investments in road projects happening in anticipation of good times

`2,100 crConsolidated debt which Ramky Infra plans to retire

`500 crAjay Piramal group’s investment in Navayuga Road Projects

BAD TIME FOR E-COMM-DEPENDENTLOGISTICS COS ��6

Some Investors Upbeat on Road Assets��8

Fresh Attack on Reliance

THE EQUITY of both the investing companies from Singapore is very smallcompared with the amount invested

BOTH INVESTING companies have claimed exemption from fi ling annual accounts to the Singapore regulator on grounds of small income

THE BUSINESS premises of one of the companies in question comprises just one room

THE ULTIMATE owner of both the Singapore companies is based in Mumbai

THE COMPANY is alleged to have invested

`6,530 crore in India

Why Indian High Commission in Singapore wanted the Centre to probe money transferred to RIL:

Reliance Hits Back at AAP’s ChargesThe allegations are highly defamatory, false, irresponsible and devoid of any merit or substance whatsoever. These false allegations...(are part of)...an orchestrated, politically-motivated campaign against us.

IT’S THE

LARGEST FDI

FROM SINGAPORE

TO INDIA

RELATED REPORTS��8

city go?