tencent | Business Upturn

Tencent to sell 2.1% stake in PB Fintech via block deal tomorrow

Markets Desk — Wed, 28 Aug 2024 13:25:59 +0000

Shares of Policybazaar or PB Fintech will be in focus tomorrow on the back of a large block deal. According to a report from CNBC-TV18, Tencent is expected to sell 2.1% stake or 9.7 million shares in the company via a large block deal tomorrow. The report stated that the block deal is likely to take place at 4.5% discount to the current market price of Rs 1,737.90 on the NSE.

The floor price of the PB Fintech block deal is set at Rs 1,660.20 per share. Furthermore, the report also said that the seller will have a lock-up of 60 days to sell any further stake in the company. As per the latest shareholding pattern, Tencent held 4.26% stake in PB Fintech.

Anti-monopoly complaint filed against Tencent by Shanghai’s PATEO

Sanah Shah — Tue, 09 Feb 2021 08:10:58 +0000

China’s smart vehicle supplier PATEO, on Tuesday 9th February 2021 in a statement accused Tencent of violating its messaging app’s significant market position to control sales of its products.

A new anti-monopoly complaint has been directed towards Chinese tech giant Tencent Holdings Ltd to regulators, this time from a supplier of smart vehicle technology and a General Motors Co China venture.

PATEO provides voice recognition features and other mobile applications that depend on Tencent’s all-in-one WeChat app. It added that Tencent has been asking car companies to stop using PATEO’s Internet of Vehicles products since August 2020.

Tencent did not immediately respond to a request for comment. The General Motors venture with SAIC Motor Corp, which put forward the request together with PATEO, also did not immediately reply to a request for comment.

The new complaint comes just after a week from ByteDance’s Chinese version of TikTok called Douyin charging Tencent of monopolistic behaviour and filing suit in a Beijing court, asking for 90 million yuan ($14 million) in compensation.

Tencent has responded saying that claim has false and said ByteDance was illegally using its users’ data.

Chinese regulators have increased anti-trust scrutiny of tech firms since December, commencing an inquiry into e-commerce giant Alibaba Group Holding Ltd and Ten Alibaba-backed and Tencent-backed firms for not seeking anti-trust reviews for deals.

KPMG points out inconsistency in Swiggy’s accounts

Sarthak Yadav — Thu, 28 Jan 2021 21:13:11 +0000

One of the world’s biggest audit firms, KPMG has pointed out discrepancies in food delivery firm Swiggy’s accounting practices in its audit report, reveals documents obtained by Moneycontrol.

KPMG has given a `qualified opinion’ to Swiggy. An auditor issues a qualified opinion when he is not convinced or has concerns about a specific aspect of the company’s accounting practices, and thinks it goes against the law.

Experts believe it is a result of technical errors and difference in opinion over laws documents said.

For FY19, KPMG (BSR & Associates LLP) gave Swiggy (Bundl Technologies Pvt. Ltd.) a qualified report because Swiggy’s financial statements do not classify the buyback rights that preference shareholders have as a liability as needed by the new Indian Accounting Standards (Ind-AS) that large Indian companies are now expected to follow.

Swiggy’s investors, including Prosus Ventures (Naspers), Tencent, Coatue Management and others, hold preference shares, which have a buyback right on them. This right is meant to protect investors when the company shuts down. However, these investors still do have a buyback right, which is why they need to be classified by law as a liability from the company’s perspective- which Swiggy did not do, as reported by Moneycontrol.

The KPMG’s report read, “Such preference shares that contain a buyback right with the holders need to be accounted for at fair value. As a result, the classification and measurement of the liability through profit and loss, the gain/loss from such adjustments, related income tax effects for the year 31st March 2019 are misstated.”

The buyback right means that after a certain pre-agreed period, if Swiggy is not able to give its investors an exit via an initial public offering (IPO) or a merger or acquisition, then the investors can sell their shares to Swiggy for an exit. However, is it highly unlikely that such a clause gets enforced. As reported by Moneycontrol.

Ind AS has been applicable to private companies with a net worth of over Rs 500 crore from 2016-17. However, many firms, particularly start-ups, have struggled to prioritise this transition as they have grown rapidly during the period and been more focused on fundraising, investor relations and core business rather than accounting- which is slowly changing today.

KPMG’s report also says that Swiggy later waived off the investors’ buyback rights irrevocably solving the issue altogether for further years.

“Subsequent to the balance sheet date, the majority preference shareholders having ability to trigger put option have irrevocably waived these rights. Basis this development and legal advice obtained by the Company as on date of the waiver, the buyback clause is neither enforceable nor exercisable. Accordingly, on the date of the waiver obtained, the above mentioned preference shares will be classified from equity to liability,” the report says.

As reported by Moneycontrol, a Swiggy spokesperson responded to a query raised them and said, “The audit qualification pertains to the Financial year 2018-19 and previous comparatives, as the Company transitioned from the previous Accounting standards (Indian GAAP) to IndAS. There are a lot of technical differences in both the standards specifically with respect to the accounting treatment of financial instruments. The classification of equity vs liability is a highly complex and often debated technical matter in the start-up industry. In the case of Swiggy, as the preference shareholders possessed certain buyback rights, which they never intended to exercise, the rights were waived off irrevocably by the investors.”

Swiggy reports 128% surge in FY20 revenue, losses expand by 65%

Ruchira Sonawat — Thu, 28 Jan 2021 06:49:28 +0000

Food delivery partner Swiggy’s net loss jumped by 65% to Rs 3,768 crore in the financial year ended March 2020 as it remained locked in a battle with rival Zomato in the online food delivery market. However, the company has reported a 127.8 per cent jump in its revenue.

Backed by Tencent, DST Global, and others, and last valued at around $3.5 billion, Zomato’s arch-rival Swiggy saw its total income rise from Rs 1,297.3 crore in FY19 to Rs 2,955.6 crore in FY20, according to regulatory filings.

“Our company’s business grew by 85 per cent, (with) addition of over 100K restaurants with an active delivery fleet of over 200K. We also widened our reach across the country by launching 405 new cities,” the company said in its filing.

The Bengaluru-based firm’s two largest sources of revenue are its platform fee for connecting restaurants to consumers, and the delivery fee it charges to transport food orders. Its earnings also include advertisement income and selling food via its cloud kitchen-based private labels like The Bowl Company, and Homely.

Its total expenses grew by nearly 80% to Rs 6,544 crore, as it spent more across verticals like staff expense, marketing and others.

During FY20, Swiggy had merged its Mumbai-based intracity premium food delivery service Scootsy into its app and had invested in ready-to-cook food startup Fingerlix whereby it acquired 26.85 per cent equity shares in Fingerlix’s parent company Maverix Platforms. Swiggy had also acquired hyperlocal delivery startup Supr Daily during the financial year.

China’s Alibaba & Tencent halt talks to buy iQIYI stake: issue prices, increased regulations

Shalmali Bhagwat — Sat, 28 Nov 2020 06:10:08 +0000

Alibaba Group Holding Ltd and Tencent Holdings Ltd are separately conducting talks with Baidu Inc to secure a controlling stake in video streaming service iQIYI Inc, people with knowledge of the matter told Reuters. But the discussions have screeched to a halt with little hope of recommencing soon as they stare at a valuation of around $20 billion demanded by Baidu and as both companies, which have their own video streaming services, face heightened scrutiny by China’s antitrust regulators. Another Chinese tech giant, TikTok owner ByteDance has also internally considered at the possibility of acquiring a controlling stake in iQIYI, three sources said.

Considered China’s equivalent to Netflix Inc, Nasdaq-listed iQIYI has a market capitalisation of $16.4 billion, which pegs Baidu’s 56.2% stake at about $9.2 billion. While it is the No 2 player in China’s video streaming market, with fast emptying coffers iQIYI has yet to break even in its 10-year history. Its latest quarterly earnings showed declines in revenue and subscribers, directly reciprocated by its shares which have lost nearly a fifth of their value in the last two weeks.

The video streaming service, whose cash and cash equivalents almost dropped to half in the nine months to end-September to 3.16 billion yuan ($481 million) plans to raise at least $1 billion in the coming months, said one person with direct knowledge of the matter. It is also being investigated by the US Securities and Exchange Commission, post a report in April made public by short-seller Wolfpack Research accused iQIYI of inflating numbers.

Investing in iQIYI now may be more complicated for Alibaba and Tencent after Beijing this month unveiled draft guidelines chiefly targeted at preventing monopolistic behaviour by internet companies. The draft’s scope ranges from big data to payment services. Purchasing iQIYI would provide ByteDance with the opportunity to step in the main market for longer length TV shows and movies.

But Baidu, which owns more than 90% of iQIYI’s shareholder voting rights, is not likely to consider ByteDance as a buyer, considering a years-long feud between the two companies in China’s digital ad market, said two sources. The search engine giant’s interest in selling its stake in iQIYI is in lieu with a shift in focus to developing artificial intelligence and autonomous driving – areas which require a heavy upfront investment.

Byju in talk for $200 million fund raise at a valuation of $12 billion

Divya Joyce — Mon, 23 Nov 2020 08:54:37 +0000

Online education startup Byju’s is close to raising $200 million in fresh capital from US investment firms BlackRock and T. Rowe Price at a valuation of $12 billion, said a person familiar with the matter. BlackRock is an existing investor in the firm.

Byju’s has other investors including Tencent, Prosus , Owl Ventures, Sequoia, Mary Meeker’s Bond Capital, and General Atlantic at a valuation of $10.8 billion. The capital being raised would be used for global expansion as well as to finance acquisitions to strengthen its offerings. Earlier this year, it acquired code-learning startup WhiteHat Jr in a $300-million cash deal.

BlackRock, Sands Capital, and Alkeon Capital joined as new investors, as part of the same round later, with valuation climbing to $11.1 billion.

With the pandemic accelerating the adoption of online education in India, the sector has seen an increase of nearly four times in investments at $1.5 billion in the first nine months of 2020, compared to $409 million in the whole of 2019, according to data from Venture Intelligence. Since the lockdown, Byju’s has added over 25 million new students on its platform. The app has over 73 million registered students and 5.1 million annual paid subscriptions. It has also introduced an online tutoring programme Byju’s Classes to cater to the after-school learning needs of students. Learning programmes in multiple vernacular languages like Hindi, Kannada, Bengali, Malayalam, and Gujarati have been introduced during the lockdown too.

The surge in investor interest also catapulted Byju’s into India’s second-most valuable startup, also earning it the decacorn status—the handful of startups that are valued at more than $10 billion.

“Byju’s is not only eyeing international expansion actively but also looking at strategic inorganic growth,” said a second person, requesting not to be named.

Companies such as Byju’s and Unacademy are benefiting from the willingness of families to spend a big chunk of their income on education and tutoring to give their children an edge amid rampant unemployment.