India Digest: Ola cuts Foodpanda budget; IDFC’s road assets sale; SMILE Microfin owners eye exit

Ola has slashed its budget for Foodpanda, while Canadian pension funds and NIIF are in talks to acquire seven road assets of IDFC. Also, Developing World Markets is again looking to sell its 67 per cent in SMILE microfinance.

Ola slashes Foodpanda budget

Indian ride-hailing major Ola has reportedly more than halved its budget for Foodpanda in an attempt to focus on private label brands, including The Great Khichdi Experiment, Lovemade and FLRT brands, to boost growth.

Sources quoted in a report in The Economic Times said Foodpanda reduced its marketing and customer acquisition costs by two-thirds, in line with Ola’s de-prioritisation plan for the business. While this move is likely to cut orders by 60 per cent, the company expects the business will grow more efficiently.

Ola acquired Berlin-based online food ordering and delivery marketplace Delivery Hero’s 95 per cent stake in Foodpanda in December 2017 for EUR 26.5 million (Rs 200.7 crore) in an all-stock deal. The ride hailing firm also invested a similar amount of money (Rs 200.7) crore in Foodpanda’s business.

At the time, it had announced plans to invest another $200 million in the food tech business, which is now facing aggressive competition from the likes of Zomato, Swiggy and UberEats.

Canadian pension funds eye IDFC road assets

Canadian pension funds Canada Pension Plan Investment Board (CPPIB) and Caisse de dépôt et placement du Québec (CDPQ), along with National Investment and Infrastructure Fund (NIIF), are said to be in separate talks to acquire Highway Concessions One.

According a source-based report in The Economic Times, the funds are looking to acquire the IDFC unit for $700 million.

US-based Global Infrastructure Partners had acquired IDFC Alternatives’ infrastructure investment business last year. It has now decided to monetise its stake in the seven road projects, which come under Highway Concessions One.

US-based Developing World Markets revives plan to exit SMILE Microfinance

US-based financial services group Developing World Markets (DWM) is again looking to sell its 67 per cent in Chennai-based SMILE Microfinance, according to a report in The Economic Times.

The news comes in a year after DWM’s first unsuccessful attempt to sell its stake last year. The company is again in talks with two or three prospective buyers for the deal, which is also likely to provide an exit to the promoters of SMILE.

DWM holds 66.64 per cent in SMILE through DWM Investments (Cyprus) Ltd, while the promoters own 18.57, of which founder N Sethuraman’s son S Gurushankar holds 15.59 per cent alone.

Also Read:
Uber rival Ola acquires Foodpanda India, commits $200m to food delivery biz

India: NIIF’s Strategic Fund acquires IDFC Infrastructure Finance

IDFC Alternatives to sell infra asset management business to US-based GIP

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