India saw the biggest Fintech festival post pandemic at the heart of Mumbai’s corporate, BKC. The experience of meeting and listening to the stalwarts of the fintech landscape was exhilarating to say the least!
The 3 day extravaganza was a great learning and networking experience for all fintech enthusiasts. The highlight was the session with Mr. Devendra Fadnavis, about making Maharashtra a trillion $$ economy and the role fintech will play!
Amidst all the euphoria, the fintech ecosystem is being brought under greater regulations and a CLEAR message that came out from the event was the need for government and fintech to work closer than ever!
RBI Governor introduced three key digital payment initiatives:
UPI Lite: For faster low-value transactions where upper limit for such transactions to be ₹200. This initiative will help is to lessen the debit load on the core banking system as almost 50% of transactions through UPI are low-value payments.
Credit Card on UPI and NRI Friendly Bharat BillPay System (BBPS) to smoothen the process of cross-border bill payments, enabling NRIs to pay for utility, education, and other bill payments.
Bottomline: Fact that RBI now has a separate Fintech body underscores the immense potential this sector holds. So Innovation + Regulation rather than Innovation vs. Regulation is the need of the hour. Afterall, kuch rules achhe hote hain!
What happened: Baba Ramdev plans to float 4 IPOs of the Patanjali Group plans in the next 5 years. That is some run rate!
High ambitionss: Company already has its foods division, Patanjali Foods (earlier called Ruchi Soya) listed. Ramdev now plans to launch IPOs of Patanjali Ayurved, Patanjali Medicine, Patanjali Wellness and Patanjali Lifestyle. Timelines of the same are yet to be out.
From INR40,000 crore currently, the group aims to increase its turnover to INR1 lakh crore by 2027.
Why this hunger? Going for an IPO is not easy and definitely not in current times. So why this rush to go public when there are no VCs pressing for an exit? Lets see why:
With group’s sky high ambitions of becoming a diversified FMCG company, debt is essential and IPO route will be like hitting two birds with one stone.
Quite layoffs: From moonlighting to quiet quitting to quite layoffs now, the working environment has undergone paradigm change post pandemic.
So what happened: Recently, Meta doubled its cost cutting targets to 10%, to be achieved in next few months. Facebook aka Meta has already started nudging out many employees by reorganizing departments and giving them a limited window to apply for other roles within the company. As opposed to more formal layoffs, Meta has long had this practice of terminating employees if they can’t find a new job internally within a month.
Revenues lower, costs higher: In its quarterly earnings report in July, Meta’s struggles were evident. A 22% Y-o-Y increase in costs and first ever revenue decline. Plus, the social media giant is burning more than $10 billion a year – a huge bet considering that metaverse is still at an early stage and it’s unclear if it will reach mass adoption.
What changed? Apple’s major privacy update has made it harder for Meta to deliver detailed user info to advertisers. As a result, ad money is flowing to TikTok and others.
A road of challenges: Meta shares, too, are down more than 56% this year, far worse than the S&P 500 (-20%), and the tech-heavy NASDAQ Composite (-26%). Looks like metaverse has been hit by a reality check!
“Cement” Leadership: Following the ₹51,000 billion crore acquisition of Ambuja Cements and its subsidiary ACC, Adani Group has instantly become the second largest cement manufacturer in the country. Adani plans to double its cement manufacturing capacity to 140 million tonnes by 2030 and dethrone Ultratech Cement as the market leader.
Capital Infusion of ₹20,000 crore into Ambuja Cements is planned through a preferential allotment of shares. The funds will be utilized to strengthen its balance sheet, invest in new technology, enhance capacity and complete acquisitions.
Bottomline: Mr. Adani is betting on economic growth and government incentives and we are too! Afterall, per capita cement consumption is just 250 kg compared to 1600kg of China. But the local dynamics of the sector is set to change. Will Adani join the unpopular cement cartel or try and lead the gang, is yet to be seen but competition is sure to heat up!
Next target: After a week of probing into startup valuation practices, SEBI has now asked for more details of those private equity and venture funds formed with a small club of investors.
Details: SEBI is looking for details like valuation practices, qualifications of valuer, any recent change in valuation methodology. Other details sought are full names of investors, country of origin, nature of entity, amount committed to and raised by the fund.
What’s the fuss? Bloated valuations often paint a rosy picture of startups and helps the fund manager to attract more money in subsequent fund-raising.
Also, often these alternative investment funds (AIFs) are mere vehicles of family offices and promoters and are overly influenced by a handful of wealthy investors.
Bottomline: All this may be a precursor to bringing in more transparency and enhancing disclosure norms for the AIF industry to protect the investor interest.
👶🏽Baby powder recalled: Maharashtra has cancelled the manufacturing license of Johnson & Johnson’s baby powder after a sample was found to be of poor quality.
👑Tata Group Dethroned: Following the acquisition of Ambuja Cement and ACC, Adani Group overtakes Tata Group as India’s most valued Conglomerate.
🥤PepsiCo Exits: The production and sales of Pepsi, 7UP, Mountain Dew has been stopped in Russia due to its ongoing war with Ukraine.
🏛Oyo for IPO: OYO, a hospitality and travel-tech firm, filed IPO documents with
SEBI for a second time.
👥No double lives: Wipro terminated 300 employees who were found to be working for its competitors while still being on the company’s payroll.
🤝Merger ahead: The Tata Group is planning to consolidate AirAsia India and Vistara under brand Air India by 2024.
📚 Reading : Less is More: How Degrowth will Save the World, by Jason Hickel
Hickel provides a big picture look at the world today and argues that we can save humanity and the planet only by abandoning capitalism and the idea of economic growth. The book provides a thoughtful breakdown of our current unsustainable society and also offers a few holistic solutions.
🎧 Listening : Squanderlust: It explores the emotional side of personal money management, why our actions aren’t always in line with our intentions and how can we become more rational at money management.
Plight of most Central Bankers around the world
China Economic Crisis: Collapse Inevitable?
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Hope you have a happy weekend!
Cheers,
Ruchi Mehta
Business Analyst
https://www.linkedin.com/in/ruchimehta-tavaga/
Disclaimer: This write-up is solely for educational purposes. This in no way should be construed as a buy/sell recommendation. Please consult your investment advisor before investing.
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