Home / Knowledge / News / Apparel/Garments / PE funding gets tighter for Indian e-tailers
PE funding gets tighter for Indian e-tailers
04
Jun '16
Access to private equity funds is getting tighter for India's e-commerce players. A fragile global recovery and recent amendment to the India-Mauritius tax treaty may keep international investors away from India, according to India Ratings and Research (Ind-Ra).

Till 2015, e-tailers were flush with private equity funds. But they have not been as fortunate this year, with muted deals during January-April 2016, Ind-Ra said in a report.

"The funding concerns have arisen at a time when e-tailers are undergoing a structural transition in their business model, involving considerable capital expenditure," it added.

Ind-Ra further said funding through conventional bank lending route is highly unlikely and consequently e-commerce firms will need to look for specialised institutional investors that have a high risk appetite to avail bridge finance.

"Such funding will only be available at a higher cost. These funds are generally extended on a short-term basis, until the next round of PE funding occurs," it added.

The report said funding from such investors will depend upon the ability of the e-tailers to maintain a level of PE confidence by sustaining its prominence and valuation, which seems to be heading southward.

E-tailers are attempting to move out of the deep discounting model to a more sustainable business model by offering lower discounts, improving efficiencies and focusing on improving loyalty among customers that require a considerable investment commitment.

"As a result, the existing players have large planned investments in the value chain namely logistics, payment banking, fulfillment centres and omni-channels with a primary focus on improving the active customer base, enhancing customer loyalty and value add services," Ind-Ra said.

The e-commerce companies are also undergoing structural changes in terms of their business model, especially after government's guidelines on marketplace model.

Ind-Ra further said established players will enjoy the first mover advantages and have limited operating expenses compared to the large capital expenditure that new entrants in the e-commerce space will need.

"However, the Indian industry is exposed to competition from global players with deep pocket and strong parentage and they will continue to be a challenge," the rating company said. (SH)

Fibre2Fashion News Desk – India


Must ReadView All

Serbian economy minister Goran Knezevic (left) and Taypa president Mesut Toprak after signing the MoU. Courtesy: Serbian Government/SeeNews

Textiles | On 20th Oct 2017

Turkish group Taypa to build textile factory in Serbia

Turkish textile group Taypa will invest euro 35 million ($41.2...

China’s textile & apparel exports rise 4.3% in Sept ’17

Textiles | On 20th Oct 2017

China’s textile & apparel exports rise 4.3% in Sept ’17

Registering an increase of 4.3 per cent year-on-year, the exports of...

Courtesy: Messe Frankfurt

Textiles | On 20th Oct 2017

Heimtextil to focus on textile solutions for architects

Heimtextil 2018, world's leading trade fair for home and contract...

Interviews View All

Anavila Misra
Anavila Collection

Fashion shows are also encouraging and highlighting sustainable fashion

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Headhonchos
Indian textile value chain

'One nation, one tax' is a great concept

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Harsh Shah

Established in 1956 with a small beginning, Embee today manufactures a...

Harmeet Singh

New Delhi-based Jogindra Industries Private Limited provides an assortment ...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Vaanee Bhatia
Gritstones Clothing

<div>Delhi-based Gritstones Clothing offers quality and exemplary style...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

October 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
77.9%
No
13.2%
Skip
8.8%

Total Votes: 68

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.8%
No
27.9%
Skip
10.3%

Total Votes: 68

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
85.3%
No
10.3%
Skip
4.4%

Total Votes: 68

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
75.0%
No
11.8%
Skip
13.2%

Total Votes: 68


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search