TATA acquires BigBasket, stress in textile sector, and SEBI’s new punch: Three things Teji Mandi investors should know on April 29, 2021
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BigBasket Goes to TATA

The Tata Group has completed the acquisition of BigBasket, one of India's leading online grocery platforms. The Indian Competition Commission approved the deal. With this, Tata Digital will be able to get up to 64.3% stake in the company.

The size of the deal is estimated at over $1.2 billion, giving an exit to two major investors - Alibaba and Abraaj group.

The grocery segment has got a big push under the impact of COVID-19. And it is the next big focus area for e-commerce giants. It clocked a gross merchandise value (GMV) of $3.3 billion in 2020 as compared to $1.9 billion in 2019.

In recent years, JioMart has entered the e-grocery segment. Flipkart and Amazon are also trying to establish in this segment. Now, with Tata’s entry, the competition will intensify by manifolds in this space.

Lay-off Possibility Looming Large In Textile Industry

The apparel retail and manufacturing industries are concerned that the lockdowns would result in significant job losses.

According to CMAI President Rajesh Masand, the industry is yet to recover from job losses of 20-25% last year. And if the situation does not change, it might get much worse.

There are about 80,000 factories manufacturing apparel in India, employing around 1.2 crore workers. Textiles is also among the top three job-creating sectors in India. Any adverse impact on this sector impacts the lower section of society as it mostly employs unskilled labourers.

Fund Managers Under The Pump

SEBI has directed mutual funds to pay a part of the salary to its top employees in the form of units of the schemes they oversee.

As per the guidelines, at least 20% of the salary, perks, bonus, or non-cash compensation of these executives will have to be paid in the form of units of mutual fund schemes. And, units allotted as compensation should also be proportionate to the assets under management of the schemes.

SEBI has introduced this new rule based on the forensic study on Franklin Templeton. The study alleged that some of the top officials of Franklin Templeton and their family members withdrew a part of their investments from some of six stressed schemes of the fund house. The withdrawal was done just before the schemes were shut for redemptions on April 23, 2020.

​The new compensation rule will apply to key officials like the fund house’s chief executive officer, chief investment officer, fund manager, research analysts, and chief operation officer among others. With this tweak, the fund managers will have more skin in the game. It will make them more responsible for the fund that they handle.

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