1. Evidence of startup wealth creation contributing to expanding the envelope of domestic risk capital,
Several unicorns are now becoming strategic investors themselves and picking up stakes in smaller companies. In 2021 restaurant aggregator and food delivery company Zomato led the pack by investing in five startups, including Curefit, Grofers, Shiprocket and Magicpin. The other player that has been buying minority stakes in smaller startups is Rebel Foods, a cloud kitchen company. It has invested in four startups, including Goodness Beverages, FoodyBuddy and Zomoz... “Investing for a minority stake in other startups can unfold serious synergies, especially when it comes to cross-selling and customer acquisition. Companies like Zomato, Swiggy, etc. can afford to compromise short-term RoI (return on investment) goals to build an ecosystem that supports their long-term growth plans,” explained Ankur Bansal, co-founder and director, BlackSoil... However, unicorns are not only acquiring minority stakes in startups — they are also aggressively pursuing merger and acquisition opportunities. Byju’s, Flipkart, PharmEasy and CRED, among others, have taken the acquisition route to grow. In fact, the number of unicorns acquiring majority stakes or buyouts have gone up significantly. The value of such acquisitions hit $1.27 billion in 2021 (year-to-date) across 45 deals, much higher than $640 million in 2020 and $111 million in 2019.
2. On a related note, India saw the emergence of 39 unicorns in 2021. The full list is here. An analysis reveals that most, if not all, of them were basically copying business models from elsewhere and adapting them to Indian context.
3. On the thinly staffed nature of the adjudication authority for corporate bankruptcy and resolution,
A back of the envelope calculation, using the US parallel and methodology and considering the present caseload of the NCLT and disposal by two-member benches, indicates a requirement of 360 members, from the present level of 63.
4. Maharashtra's radical plan to phase out internal combustion engine vehicles.
Maharashtra is considering a radical plan to deregister vehicles that run on petrol and diesel, followed by a complete ban from 2030, two people aware of the development said... It involves registering only electric vehicles (EVs), and those powered by other carbon emission-free next-generation fuels such as hydrogen starting 2030... Last year, the state introduced an EV policy wherein all EVs sold in Maharashtra are exempt from road tax and registration charges. EVs will make up 10% of all new vehicles registrations by 2025, with Brihanmumbai Electric Supply and Transport (BEST) planning to run an all-electric bus fleet by 2027.
5. Some data on Indian agriculture from the "Situation Assessment of Agricultural Households" survey of the NSSO of 2018-19,
Of the average household income of Rs 10,210 per month, crops contribute only Rs 3,798. A larger sum of Rs 4,063 comes from wages, and the rest from other sources. In contrast, in 2012-13, the returns from crops worked out to Rs 3,081 while the share of wages was much lower at Rs 2,071... The count of non-cultivator rural households has swelled from around 66 million in 2013 to nearly 80 million in 2019... The average outstanding loan per household has risen from around Rs 47,000 in 2012-13 to as much as Rs 74,121 in 2018-19. Thus, while the farmers’ income (nominal) has increased by around 60 per cent during this period, their average debt has also simultaneously shot up nearly by the same proportion — about 57 per cent... the terms of trade for agriculture (the ratio of agricultural versus non-agricultural prices)... shows a decline from 99.07 in 2016-17 to 96.43 in 2018-19... The size of an average landholding has shrunk from 0.8 hectare at the beginning of 2000s to 0.5 hectare in 2019.
6. Business Standard on the rise of Indian billionaires in 2021,
The number of promoters and businessmen with net worth of $1 billion (around Rs 7,500 crore) reached an all-time high of 126, up from 85 at the end of CY20. These billionaire promoters have a combined wealth of around $728 billion (around Rs 54.6 trillion), up from around $483 billion (around Rs 35.3 trillion) at the end of 2020. The combined wealth of the 126 billionaire promoters in Business Standard’s list is equivalent to a quarter of India’s expected gross domestic product (GDP) of around $2,947 billion in FY22 at current prices. The billionaire's wealth-to-GDP ratio was 18.6 per cent last year.
7. Summary of clean energy investments planned by big corporations in India,
While Reliance Industries (RIL) made a splash with a Rs 75,000 crore investment plan in green energy, Adani Enterprises is betting $20 billion in the same... petrol pumps could become a thing of the past, with leading players gearing up to offer “integrated energy stations”. These ‘Mobility Stations’, as Reliance BP Mobility (RBML) is calling them, will have electric vehicle (EV) charging and/or battery swapping, along with petrol and diesel dispensing units. State-owned OMCs, Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL), have also announced plans to set up 22,000 EV charging stations over the next three years... HPCL has tied up with Convergence Energy Services (CESL) and Tata Power for the setting up of EV charging stations at its petrol pumps. IOCL, too, has collaborated with Tata Power, Rajasthan Electronics and Instruments (REIL), PowerGrid Corporation of India (PGCIL), NTPC, Fortum, Hyundai, Tech Mahindra, Bharat Heavy Electricals Limited (BHEL) and Ola to set up EV chargers at its fuel stations... State-owned NTPC has targeted to add 60 GW of renewable energy in the next two decades. JSW Energy plans to halve its carbon footprint by 2030 and be a Net Zero company by 2050. Adani Enterprises has announced it will triple its renewable power generation capacity over the next four years to 63 per cent, from 21 per cent currently.
And this on partnerships that are being struck by Indian corporates in renewables and electric vehicle space.
8. Bloomberg has an excellent story on the coming energy transition. This graphic captures the transition.
Solar panels with the power capacity of a gigawatt need about 18.5 tons of silver, 3,380 tons of polysilicon and 10,252 tons of aluminum... Wind turbines and infrastructure with the power capacity of a gigawatt need about 387 tons of aluminum, 2,866 tons of copper and 154,352 tons of steel... Lithium-ion batteries able to store 1 gigawatt hour of energy require about 729 tons of lithium, 1,202 tons of aluminum and 1,731 tons of copper... A fast, public electric vehicle charger typically needs 25 kilograms of copper, while a smaller charger to use at home needs around 2 kilograms of copper.
Finally, on the falling prices of batteries and the race to increase the energy density of lithium-ion batteries.
9. Interesting Virat Kohli batting statistic that may point to the role of plain luck,
Kohli's average while playing the cover drive and off drive has dropped significantly over the last two years. His control percentage while playing those shots, however, has actually improved, and significantly - from 72.73 to 82.72.
We could do more analysis to disaggregate the out of control percentages. Assuming different levels of lack of control, with associated higher probabilities of getting out, is there an increase in the share of those shots where the batsman is least in control (like the 11th stump drives).
Or we may be simply over-analysing things, when the real issue is just change of luck!
10. RBL Bank joins the list of private sector banks with corporate governance concerns. ICICI Bank, Yes Bank, Dhanalaxmi Bank, Lakshmi Vilas Bank, Ujjvan Small Finance Bank have all been found guilty of corporate governance failings. This is yet more evidence against the argument that private sector banks in India are somehow superior in their corporate governance.
11. India corporate finance facts of the day,
Taking an average of the three years ending 2019-20, only 2 per cent of the flow of commercial finance came from public issues. As a percentage of GFCF by the private corporate sector, public issues also amount to just 2 per cent and private placements to 9 per cent. The major source remains bank credit, which accounted for 49 per cent of the flows... According to a 2018 study, out of the total debt of Rs 69.3 trillion incurred by the micro, small and medium enterprises (MSMEs) only ₹10.9 trillion came from banks and other formal sources.
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