Campa Cola relaunch, fresh trouble for Air India, funding for Byju’s, Ratan Tata's life

The Federal brings you the latest developments in the Indian economy, including the automobile sector, the aviation industry, and the health of our financial system.

Byju’s set to get fresh funding

With Byju’s planning to raise $400 million-$600 million, an ET report said Abu Dhabi-based fund pool 10X AD is in talks with Byju’s founders to invest in the parent company, Think and Learn Pvt Ltd fund pool consists of investment vehicles such as mutual funds, group trusts, real estate funds, limited partnership funds, and alternative investments.

What it implies: If the investment does come through, it will help Byju’s tide over a significant fund crisis it currently faces. The edtech major has been in the news concerning the retrenchment of hundreds of employees, sliding valuation and ‘toxic work culture’ and unpaid loans. According to various reports, specific lenders have asked Byju’s to repay part of the $1.2 billion loan, with one of the investors downgrading its valuation to half of the current valuation of $22 billion. The edtech company has also yet to announce its 2021-22 results. For 20-21, it reported a loss of Rs 4,588 crore and revenues of Rs 2,428 crore.

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Air India pilots’ union ask members to reject the new pay plan

Air India pilots have accused the management of creating a divide among the pilots by promoting captains with over four years of experience into the management.

What it implies: Tata Sons are finding it increasingly difficult to turn around Air India with hurdles at each turn. From appointing a CEO for the airline who quit within days of taking over to pee gate controversy, the management is now confronted with a brand-new dispute regarding the rollout of a new pay structure for pilots and the crew. Notably, around 1,000 pilots working with all four Tata Group airlines attended the meeting called by the pilots’ association. Air India has said it does not recognise any trade union within the airline and claims several of them have already agreed to the new pay structure. However, the pilot protest indicates it could impact the airlines’ operations shortly. The Indian Commercial Pilots Association and the Indian Pilots Guild, who represent Air India pilots, have a history of disrupting the airline’s work whenever their demands are not met.

Wipro asks freshers to take another test or get fired

Wipro has asked freshers whose salaries were reduced from the promised Rs 6.5 lakh to Rs 3.5 lakh annually to take up another test and score over 60 per cent to retain their jobs.

What it implies: Wipro, which had sacked a few hundred employees for moonlighting as it violated work contracts, has said that the freshers’ jobs will be terminated if they do not pass another Project Readiness Programme test with over 60 per cent marks. However, Wipro hasn’t clarified yet on why it insists on another test when candidates go through strict pre-recruitment tests and interviews before being placed.

Nuvama Equity Research Report: How Reliance wants to carpet bomb its new acquisition, Campa Cola

With the launch of Campa, RCPL (Reliance Consumer Product Ltd) has strengthened its portfolio in the beverage segment, along with the JV with Sosyo Hajoori Beverages. The Campa portfolio is priced competitively. As per media reports, the company is in advanced talks for a partnership with leading Chennai-based Kali Aerated Water Works (Kalimark), makers of Bovonto soft drinks, and the manufacturing and distribution of the Campa range of products. For enhanced branding, RCPL has partnered with three IPL teams as ‘pouring partners’ to plug Campa Cola in this cricket season.

The company is known for disrupting sectors it forays into, mostly by steep discounting in the initial stages. RCPL has resorted to ‘buying’ over ‘building’ to scale the business. It acquires brands and products that already have a presence in the market. However, given the limited shelf space, distribution in kiranas will take time. Apart from pricing, other essential factors shall also be considered, such as quality, consistency, aggressive marketing etc.

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Relaunch of iconic beverage brand 

With the launch of Campa, RCPL will further strengthen its portfolio in the beverage segment. It acquired the aerated drinks brand Campa from Pure Drinks for Rs 22 crore in late August 2022. The Campa portfolio will initially include Campa Cola, Campa Lemon and Campa Orange in the sparkling beverage category and will be priced competitively.

Campa’s history 

Campa Cola was a massive part of the Indian market for over two decades before two US-based cola giants led to the eventual decline of the desi cola brand. In its era, it had established itself as a well-acquainted brand nationwide. As the brand has a trusted customer base within the nation, adopting it again is not a laborious task for RCPL. Campa Cola vanished from the shelves of grocery stores by the year 1999 but is now making a comeback as Reliance acquired the brand Campa Cola.

About the portfolio 

The company stated that the Campa portfolio would initially include Campa Cola, Campa Lemon and Campa Orange in the sparkling beverage category. Five pack sizes are on offer under the Campa range for several occasions – 200ml immediate consumption pack; 500ml and 600ml on-the-go sharing packs; and 1,000ml and 2,000ml home packs.

These products are priced competitively at Rs 10 for a 200-ml bottle and Rs 20 for a 500-ml bottle. With the rapidly evolving Indian market throwing up more consumption occasions, the launch of Campa is yet another bold step towards expanding its FMCG business. A strong distribution and aggressive pricing strategy by RCPL would surely revive Campa Cola in India (similar to what they did in the case of Reliance Jio).

Distribution partnership: Chennai-based Bovonto soft drinks maker

As per media reports, the company is in advanced talks for a partnership with leading Chennai-based Kali Aerated Water Works (Kalimark), makers of Bovonto soft drinks, and the manufacturing and distribution of the Campa range of products.

Bovonto is one of the largest cola brands in the southern markets and competes aggressively with multinational brands. Kali Aerated, which also makes lemon, orange and ginger ale fizzy drinks, has more than eight plants in the South. It also sells juices and tender coconut water. If this deal flows through, it may benefit RCPL with Bovonto’s manufacturing lines, strong distribution outreach, and a distinct edge over the competitors.

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Tie-up with IPL teams 

RCPL has tied up with three IPL teams – Lucknow Super Giants, Punjab Kings Squad, and Sunrisers Hyderabad as ‘pouring partners’ to plug Campa Cola in this cricket season. The idea is to give Campa Cola visibility on the field, especially during strategic timeouts when the teams will be breaking for cool drinks. The branding is expected to be through title sponsorship, jersey partnering, refreshment partnerships, etc.

On the ball: Why every FMCG player needs to watch out for RIL 

RIL plans to partner with 10 million merchants over five years. The company has already started onboarding super stockists and distributors. It could offer higher margins to trade to compete aggressively. Media reports suggest RIL offers super-stockists double the margins other FMCG companies provide.

RIL would deploy analytics and data of Jiomart. Courtesy JioMart, RIL has insights into consumer behaviour, making it easier to launch products selectively and better gauge consumer response to determine and drive product success.

Digital commerce platforms (such as JioMart and Milk Basket) fulfil an average of 6 lakh orders daily. The company’s supply chain is being set up. RIL plans to sell products in the FMCG food, home care and personal care categories. We expect RIL to look for targets among regional/D2C brands aggressively.

RIL’s plan of action

RCPL has onboarded former Coca-Cola Chairman T Krishnakumar, ex-chairman of Coca-Cola India. This could imply a higher focus by RCPL in the packaged food and beverages segment. Besides scaling up its private labels at kirana stores, the company plans to acquire regional players and D2C brands.

With the launch of Independence, RCPL, in our view, would aim to target the more commoditised parts of FMCG, such as pulses and grains, edible oils, flour, dry fruits, spices, pickles, pastes, idli dosa batter, nankeens, sweets, etc. Per our channel checks, RCPL has already hired 200 people for its corporate office and almost 20,000 people in the ground team with experience in the FMCG industry to pursue its interests in the FMCG space.

Book Launch: Ratan Tata – A Life
Harper Collins
Author: Thomas Mathew

Ratan Tata is one of our time’s most influential and inspirational personalities. This iconic business leader has been instrumental in transforming independent India into a modern, industrial nation.

Established in 1868, the Tata Group spans industries from salt to steel to software and is synonymous with quality and trust. It operates in more than 100 countries, impacting the lives of billions of people around the world. The abiding goodwill and respect that the Tata brand carries today can be traced back mainly to the vision and integrity of one who spearheaded the conglomerate for over two decades – Ratan Tata.

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Starting as a novice on the shop floor of a Tata company, Ratan Tata achieved an unequalled growth rate for the Tata Group as chairman. He took India to the world through global acquisitions, overcoming many serious challenges.

This fascinating biography traces Ratan Tata’s years in immaculate detail, from his lonely childhood to his irrepressible youthful exuberance, from his first significant role in the Tatas to being appointed chairman of the group in 1991 and to his role today as the head of Tata Trusts, India’s largest philanthropic enterprise. It is as much a story of determination and an unwavering commitment to enduring principles and values as it is a testament to achieving unprecedented corporate success.

Drawing on unfettered access to Ratan Tata, his personal documents and the group’s records, and filled with previously unknown facts, anecdotes and the author’s insights, this is a comprehensive account of life the likes of which the world has seldom seen.

(Profile courtesy: Harper Collins)