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Eternal, Swiggy drop as Rapido undercuts food delivery commission

Eternal, Swiggy drop as Rapido undercuts food delivery commission

Time of India09-06-2025
Shares of
Zomato
parent
Eternal
and its duopolistic rival
Swiggy
dropped as much as 2.5% and 4% on Monday as
Rapido undercut them
in commissions levied from restaurants. The unlisted ride-hailing platform is looking to foray in the
food delivery
space.
Eternal shares closed 1.86% lower on BSE at Rs 256.99 per share, after hitting an intraday low of Rs 255.35. Prosus-backed
Swiggy
ended the day's trade 2.79% lower at Rs 364 a share, falling to Rs 360.10 apiece earlier in the day. The benchmark Sensex closed 0.31% higher at 82,445.21.
The drop in shares comes after
Rapido
began partnerships with restaurants for its online food delivery service at nearly 50% lower commissions than Swiggy and Zomato.
According to the agreed-upon terms with the industry body National Restaurants Association of India (NRAI), Rapido will charge a flat commission of Rs 25 for all orders below Rs 400, and Rs 50 for orders worth more than Rs 400. This translates to 8–15% of commission from restaurants, compared to 16–30% that
Zomato
and Swiggy charge, as ET reported.
Recent months have seen multiple small restaurant owners calling out what they alleged are "steep charges" levied by Zomato and Swiggy. "Zomato is becoming unsustainable for small restaurant owners like us," Vandit Malik, founder of The Garlic Bread, wrote on LinkedIn three weeks back. "To even be visible on the platform, I'm forced to spend Rs 30+ per order on ads. What's left? Pennies. Sometimes, not even that," he alleged.
The owners of another NCR-based small restaurant, Saffroma, wrote on X last week, which went viral, that it was quitting Zomato, alleging "zero payouts, mystery service charges and advertisements initiated without approval." The post has since been deleted.
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Food delivery outlook
India's online food delivery market is expected to more than double to $15 billion by March 2029, according to a December 18 report by JM Financial. Platforms had penetrated only about 11% of the country's total food consumption in 2023, compared with 40% in China and 58% in the US, it said.
In a note dated June 2, Global financial services firm Morgan Stanley picked Deepinder Goyal-led Eternal as its top investment pick in the Indian food delivery sector, citing market leadership in both quick commerce and food delivery, healthy unit economics, stronger balance sheet than peers, and sound risk-reward.
It kept its
target price for Eternal
's stock at Rs 320 per share, implying a potential upside of 24.5% from the stock's current price.
Initiating coverage on Swiggy
earlier this month, the brokerage firm pegged its target price for the stock at Rs 405 per share, marking a potential upside of 11.3%.
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After 'good' trials, roads min junks L1 bidding mode
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After 'good' trials, roads min junks L1 bidding mode

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In Shakti Bhog ruling, NCLT lays down precedent for insolvency of firms facing money laundering probe
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The Print

time31 minutes ago

  • The Print

In Shakti Bhog ruling, NCLT lays down precedent for insolvency of firms facing money laundering probe

The NCLT was hearing a plea for the dissolution of the Delhi-based Shakti Bhog Snacks Limited (SBSL), a subsidiary of Shakti Bhog Foods Ltd (SBFL), which has been under investigation by the Enforcement Directorate (ED) for allegedly siphoning off loan funds amounting to over Rs 3,200 crore. Legal experts, however, have questioned the judgement because keeping a firm with no viable business or assets alive solely to face criminal liability is unreasonable, especially when its promoters or decision-makers would likely face prosecution anyway. New Delhi: A company or its sister concern facing a money laundering investigation by the Enforcement Directorate can't be liquidated through the provisions of the Insolvency and Bankruptcy Code, the National Company Law Tribunal (NCLT) ruled Monday, adding that it would amount to judicial overreach. It said dissolution of the company would create a situation in which the company would cease to exist and hence escape criminal liability. Additionally, the NCLT bench noted that the dissolution of the company, when it has been listed as an accused in the prosecution complaint under provisions of the Prevention of Money Laundering Act (PMLA, 2002), would frustrate the proceedings before the Special PMLA court, which has sole authority under the Act. The NCLT was deciding the plea of one Umesh Gupta, the resolution professional of Shakti Bhog Snacks Limited (SBSL), seeking dissolution of the firm under Section 54 of the Insolvency and Bankruptcy Code, 2016. The insolvency proceedings against SBSL were initiated upon the application of Goyal Tea Agencies Private Limited, an operational creditor to the firm in 2023. In Insolvency and Bankruptcy Code proceedings, an operational creditor is the firm or creditor to which the firm owes a debt. The firm under debt is called the corporate debtor. After admitting the application, the NCLT appoints one resolution professional to conduct the proceedings on behalf of the corporate debtor, in this case, SBSL. However, even before the application was moved, the ED had opened a money laundering probe based on an FIR by the Central Bureau of Investigation (CBI). The probe agency had arrested the firm's chairman and managing director (CMD), Kewal Krishan Kumar, along with his son and nephew, who were directors in group firms. 'In view of the grave and substantiated allegations of money laundering, the admitted implication of the Corporate Debtor as an accused party in pending proceedings under the Prevention of Money Laundering Act, 2002 ('PMLA'), and the ongoing prosecution before the Hon'ble Special Court, this Adjudicating Authority is of the considered view that allowing dissolution of the Corporate Debtor at this juncture would be premature, impermissible, and contrary to the settled scheme of law. Dissolution under Section 54 of the IBC results in the Corporate Debtor ceasing to exist as a legal entity,' the NCLT further noted. 'Such a consequence would inevitably frustrate the ongoing criminal prosecution under the PMLA and defeat the authority and jurisdiction of the Learned Special Court, which is statutorily vested with the power to try offences under the PMLA and adjudicate upon related attachments and confiscation proceedings,' a New Delhi bench of NCLT observed in its order on Monday. On the other hand, senior advocate Vikas Pahwa emphasised the distinction between IBC and PMLA and their application while dealing with offences conducted by a company and its directors. 'The IBC is a civil economic legislation intended for time-bound resolution or liquidation, whereas PMLA is a penal statute targeting individuals for offences involving proceeds of crime. The company, being defunct with no assets or liabilities, should not be indefinitely kept alive merely due to the pendency of criminal proceedings, especially when the alleged offence was committed by individuals in charge of the company at the relevant time. Criminal liability under PMLA is personal and can be pursued independently against such individuals, even after the company is dissolved,' Pahwa told ThePrint. He further argued that the dissolution of the firm—in this case Shakti Bhog Snacks Limited—will not prejudice the ED's investigation. 'No prejudice will be caused to the ED's investigation or prosecution by allowing dissolution. If any property stands attached under PMLA, that attachment remains unaffected. Moreover, prosecution against the company, if necessary, can proceed under the provisions of the CrPC or PMLA in its absence,' Pahwal further said. The tribunal further emphasised that, regardless of the value of the assets attached during the proceedings under the PMLA, the character of the proceedings will ultimately determine the outcome. 'This Adjudicating Authority cannot assume jurisdiction in a manner that would render the Corporate Debtor unavailable for criminal liability, particularly when it stands named as an accused, and assets, however meagre, are under attachment. It is not the quantum but the character of the proceedings that is determinative,' the tribunal further noted. 'The IBC cannot be used as a mechanism to frustrate or sidestep the legitimate process of law under the PMLA. Accordingly, this Adjudicating Authority finds no merit in the request for dissolution and declines to grant the relief sought under Section 54 of the Code,' it further remarked. Section 54 of the IBC deals with dissolution of corporate debtor. 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Based on the complaint, the CBI had on 31 December 2020, booked the SBFL, its CMD Khurana, his son and wife in their capacity as directors and guarantors of the company as well as some unknown public servants under section 120B (criminal conspiracy), 420 (cheating), 467 (forgery of valuable securities and wills), 468 (forgery for the purpose of cheating) and 471 (using as genuine a forged document or electronic record) of the IPC as well as relevant sections of the Prevention of Corruption Act. The ED opened an ECIR against the same set of accused on 31 January, 2021, and arrested Khurana in July of the same year. The agency followed up with more arrests, including Siddharth Kumar, Khurana's son, and his nephew, Tarun Kumar, who was the vice-president of purchase at the firm. The agency had also arrested a chartered accountant and entry operators as part of a probe. Over the course of the investigation, the agency has filed a total of six prosecution complaints, making all of them, including the firm, accused under section 70 of the PMLA. The agency has alleged that the firm and its directors diverted funds taken from loans to sister concerns of SBFL without any actual business, based on fake bills. In this process, the agency has alleged that the directors used approximately 108 dummy entities through which money was transferred with the assistance of entry operators. The insolvency professional filed the latest application for the dissolution of SBSL after discovering that the ED had sealed the firm's office. Notably, the ED has attached assets worth Rs 131.93 crore as part of the probe against the firm. In the application, the professional has stated that only SBI appeared during the meeting of the Committee of Creditors to stake a claim to the firm's assets. However, after evaluating the firm's assets and the viability of its business, the committee decided to dissolve the firm. Citing previous such judgements, the applicant pleaded that the tribunal should proceed with dissolution without undergoing the liquidation process under Section 54 of the IBC. In response to the plea, the agency submitted to the tribunal that Shakti Bhog Snacks Limited is a group company of Shakti Bhog Foods Limited and that its bank accounts were used for the rotation of funds by the director of the parent firm. 'The ED submitted that SBSL acquired and possessed proceeds of crime to the tune of Rs 97.87 crore from six group entities of SBFL, namely M/s Bhawna Portfolio Pvt. Ltd., M/s Divyarth Leasing & Finance Pvt. Ltd., M/s Divyashakti Hospitality Pvt. Ltd., M/s Fruto Fresh Industries Pvt. 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ED arguments over in Herald case, it's Gandhis' turn now
ED arguments over in Herald case, it's Gandhis' turn now

Time of India

time32 minutes ago

  • Time of India

ED arguments over in Herald case, it's Gandhis' turn now

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