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  • Bloomberg

    Amazon, Microsoft Swoop In on $24 Billion India Farm-Data Trove

    (Bloomberg) -- Amazon.com Inc., Microsoft Corp. and Cisco Systems Inc. are among technology giants lining up to harness data from India’s farmers in an ambitious government-led productivity drive aimed at transforming an outmoded agricultural industry.Most Read from BloombergThe Global Housing Market Is Broken, and It’s Dividing Entire CountriesIstanbul Turns Taps on Old Fountains, Joining Global Push for Free DrinksFor Christo and Jeanne-Claude, Wrapping the Arc de Triomphe Is a Final VictoryIs

  • Bloomberg

    Corporate Giants Join the Global Race to Fight India Covid Crisis

    (Bloomberg) -- As Indian authorities and hospitals struggle to cope with record Covid-19 infections and deaths, companies ranging from the nation’s biggest conglomerate to global giants like Amazon.com Inc. are stepping in to help ease the crisis.Reliance Industries Ltd., controlled by Asia’s richest man Mukesh Ambani, the Tata group, global drug giants like Gilead Sciences Inc., technology titans such as Alphabet Inc. are all rushing in supplies and funds. Blackstone Group Inc.’s Chairman Stephen Schwarzman said his private equity firm is committing $5 million to support India’s Covid relief and vaccination services to “marginalized communities.”With haunting visuals of mass funeral pyres, long lines of ambulances outside overcrowded hospitals, and desperate pleas on social media for oxygen canisters, the unfolding tragedy is prompting some of the biggest corporations to organize aid for a country they view as a crucial market with 1.3 billion consumers. India’s federal and state governments, grossly unprepared to tackle the latest coronavirus wave, have also encouraged the non-state sector to help narrow the vast chasm of shortages.Most critical has been the unavailability of medical oxygen, and a bulk of the efforts have been directed at boosting supplies. Ambani’s Reliance, Tata Steel Ltd., ArcelorMittal Nippon Steel India and JSW Steel Ltd. are among manufacturers that have diverted thousands of metric tons of liquid medical oxygen from their plants. Others such as consumer giant ITC Ltd. and the Adani Group -- controlled by India’s second-richest man Gautam Adani -- are shipping in cryogenic tanks, and offering portable concentrators and generators.‘More Important’“Saving lives is more important than producing steel,” said Sajjan Jindal, chairman of JSW Steel, the largest producer of the gas among the country’s non-state companies in India.State-owned refiners Indian Oil Corp. and Bharat Petroleum Corp. chipped in with oxygen production as well.Underscoring the severity of the latest wave, official data on Wednesday showed new infections rose by 360,960 in the prior 24 hours, while 3,293 additional lives were lost -- both a record for the country. India has the world’s fastest growing caseload. Total confirmed virus cases reached 18 million while deaths topped 200,000, and reports indicated both the numbers may be under counted.As the enormity of India’s challenges shook the world, Indian-origin technology industry czars have extended help. Earlier this week, Silicon Valley investor Vinod Khosla tweeted an offer to fund public hospitals and import planeloads of bulk oxygen or supplies to India to improve stocks. A day later Microsoft Corp. Chief Executive Officer Satya Nadella said he was “heartbroken” by the situation in India and Microsoft is using its voice, resources and technology to aid relief efforts and help purchase oxygen concentrators.Alphabet CEO Sundar Pichai said in a tweet that Google and its employees would rush medical supplies and support non-profits in a country that’s a sizable market for its products. His company has proffered some $18 million in funding.Amazon is harnessing its global logistics supply chain to airlift 100 ICU ventilator units from the U.S., and the equipment will reach India in the next two weeks, the company’s local chief Amit Agarwal said in a blog post. The e-commerce giant will help install, maintain and train personnel to use the machines, he said.Apple Inc. CEO Tim Cook said the iPhone maker would donate relief but didn’t provide details.Remdesivir AvailabilityGlobal drugmakers including Merck & Co. are licensing critical drugs to Indian generics manufacturers. Eli Lilly & Co. offered to donate Covid antibody drugs, while Gilead this week said it would expand the availability of Remdesivir, a drug used to treat symptoms of Covid-19.Several industry lobby groups are also jumping in. A collective of members of the prominent U.S. India Business Council plans to supply 20,000 oxygen concentrators in the coming weeks. The Confederation of Indian Industry, which counts the biggest Indian companies as members, is setting up a task force to augment supplies of oxygen.Digital payments startup Paytm said it will airlift 21,000 Oxygen concentrators by early May, and send it to government and private hospitals, and Covid care facilities.Ambani PhilanthropyThe Ambani family’s Reliance Foundation has set up Covid care facilities with 875-bed capacity in Mumbai. The philanthropic arm of India’s most valuable company will newly create, commission and manage 100 ICU beds that will become operational in mid-May. A team of over 500 staffers -- doctors, nurses and non-medical professionals -- will be deployed round-the-clock to tend to patients.In a phone interview from New York, Blackstone’s Schwarzman said this is an “exceptionally difficult situation” for India, where the firm has a “large important business.” Blackstone has invested billions of dollars in India and owns many of India’s big office towers.“Each country, both in the developed and developing world, had great troubles with Covid,” he said. “All countries have learned lessons during Covid and I am sure India will adopt as many of these lessons as they can.”(Adds detail in 14th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Bloomberg

    Tobacco Nationalism Is More Toxic Than Tobacco

    (Bloomberg Opinion) -- Although one in four of all adult Indians use tobacco, the country’s addiction runs far deeper. The government, too, has a toxic dependence. It’s called ITC Ltd. Formerly known as Imperial Tobacco of India, later renamed India Tobacco Company, and finally truncated to just ITC, the 110-year-old conglomerate is 29.4% owned by British American Tobacco Plc. About 28.5% is controlled by various Indian state-run insurance companies and a government-controlled bad bank.And therein lies the problem. The large quasi-state ownership is acting as a value trap. It’s preventing the $25 billion enterprise from being carved up into a pure cigarette company, owned by BAT, and a supply-chain platform like China’s Pinduoduo Inc., which is nearly four times bigger in enterprise value. It's a missed opportunity, not just for ITC’s minority shareholders, but for India. Now that the country is giving farmers the freedom to sell their produce outside state-designated market yards, a corporate buyer like ITC that has distribution capabilities in the smallest of Indian towns (thanks to cigarettes) has a shot at building a meaningful digital, agri-business franchise. One that’s able to obtain better prices for producers. As for the core tobacco business, London-based BAT has tried in the past to raise its stake and take over the cigarette maker, but local managers have seen it off using Indian financial institutions’ voting power. However, many investors are now wondering if empire-building by ITC’s management, in the garb of protecting national interests, has gone too far.A cash-strapped New Delhi, which is delaying fiscal support to an economy expected to lose a 10th of its real output this year to Covid-19, also needs to rethink its stance: What additional harm will befall if BAT wins ITC’s successful cigarette division, paying a hefty control premium to acquire smokers, a vanishing breed in developed markets? In return, India can wrest a time-bound commitment from the new owner to steer the revenue toward, say, 25% reduced-risk products like the Swedish snus and heat-not-burn devices. That will mean a fall in future healthcare costs from lower tar consumption. ITC scored 0.62 in Foundation for a Smoke-Free World’s 2020 Tobacco Transformation Index, better than China National Tobacco Corp., but way behind BAT, Philip Morris International Inc. and Swedish Match AB. “Companies that offer reduced-risk products are mostly focusing their efforts on selected high/medium income countries, where overall smoking rates are lower and cigarette sales are already declining,” says the new study. India can negotiate a better outcome with BAT.Let the $3.3 billion cash pile plus the non-tobacco parts — hotels, information technology, finance, fashion, potato crisps, paper, safety matches and what not — get sequestered under a separate holding company. The Indian managers get to keep what they can turn into a digital, agri-business-led supply chain, and sell the rest. This way, the government will extract much-needed budgetary resources. The value trapped in the conglomerate will get released.The deadlock between two equally poised large shareholders is hurting minority owners. The stalemate has gone on for too long. A quarter-century ago, the fight was over whether ITC should be setting up power plants. The state-led economy had just started liberalizing and there was an acute shortage of electricity. The Indian cigarette maker was sitting on a cash hoard. Had BAT wrested control, it wouldn’t have allowed the funds to be put into unrelated businesses. But BAT’s tenuous hold weakened after a currency-control violation saw a change in leadership at the Kolkata-based firm.Yogesh “Yogi” Deveshwar, the new chairman in 1996, took the government’s help to defeat BAT’s plan for a separate unit to sell international brands like 555 State Express and Benson & Hedges cigarettes in India. Since then, the local business has increasingly charted its own course. Now, BAT can’t even try to mount a bid for all of ITC because tobacco has been made off-limits for foreign direct investment since 2010. That, too, was done to keep ITC in Indian hands.To what end, though? As much as 84% of ITC’s $2.8 billion pretax profit last year came from cigarettes, but four-fifths of the $325 million-plus capital expenditure was in snacks, hotels and paper. The dividend payout ratio did jump last year to 81%, yet the previous 18 years’ average is just 50%, almost 20 percentage points lower than BAT’s distribution.The U.K. associate, which has just one representative on the Indian firm’s board, has returned $2.1 billion to its own shareholders via buybacks over the past six years. No such luck for ITC investors. They can’t be offered a buyback, lest it increases BAT’s shareholding. Widows and pensioners get a 6% dividend yield, 5 percentage point more than on the benchmark Nifty 50 index. It’s a bit like collecting pennies in front of a value-crunching steam roller. In the past 10 years, ITC shares have lost 11% of their dollar value, while an investment in Nestle India Ltd. has tripled. The opportunity ahead is clear. Agri-business offers the chance “for building a digital platform linking retailers with consumers, something that Chinese companies like Pinduoduo have done successfully," said Gaurav Patankar, head of emerging market equity strategy at Bloomberg Intelligence. As Mukesh Ambani, India’s richest man, and the 152-year-old Tata Group mimic platforms from the likes of Tencent Holdings Ltd. and Alibaba Group Holding Ltd., ITC can plug another gap, provided New Delhi gives up its addiction.Tobacco is toxic. India is finding that tobacco nationalism is an even harder habit to quit.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.