victorybull

Author: victorybull

  • Saregama India plans to invest up to Rs 750 cr in music business

    Saregama India, a part of RP-Sanjiv Goenka Group, is planning to invest up to Rs 750 crore in its music business to achieve a 25-30 per cent revenue growth in the next few years through organic and inorganic routes, an official said.

    It is also foraying into a new business segment of artiste partner programme to launch their music videos and audios on its platforms with an arrangement of sharing revenue, he told analysts.

    The fund (of up to Rs 750 crore) is only for the music business. This is not going to be used for our films or our Carvaan business. Other businesses are well capitalised and they will be able to manage to run on their own…. Our projection of 25-30 per cent revenue growth that we are giving is a combination of both organic, new content purchases, and some inorganic purchases,” the official said.

    On music licencing and the film business, the company is also looking at 25-30 per cent growth next year, he said.

    Saregama announced its partner programme for all singers and musicians wanting to do covers, recreations and remakes of its catalogue across all languages.

    “The company has categorised partnerships into three segments. The first is Diamond plus for which revenue share is 20 per cent, while Diamond revenue share will be 10 per cent and for the gold category, which is only for audio, it is also 10 per cent,” the official added.

  • Not just IPO investors, even Warren Buffett is losing money in Paytm

    The collapse in the shares of Paytm following India’s largest initial public offering is proving an expensive lesson for the firm’s early backers.

    Paytm shares have tumbled 58% since the stock listed on Nov. 18. That’s cut the valuation of its parent One 97 Communications Ltd. to $7.8 billion from $20 billion.

    SoftBank Group Corp.’s 2017 investment valued the Indian company at about $7 billion, according to people familiar with the matter. Berkshire Hathaway Inc. invested in One 97 when the company was valued at more than $10 billion in 2018, and T. Rowe Price Group Inc. invested at a $16 billion valuation the following year, the people said.

    Paytm is struggling to convince investors and analysts alike of the potential for the digital payment giant’s business model. Losses widened to 4.74 billion rupees ($63 million) in the July-to-September quarter from a year ago amid rising expenses. The plunge in its shares amid a global equity selloff has also cast a shadow over the prospects for technology firms preparing to go public in the Indian market. More than 40% of firms that sold shares for the first time in India last year are under water.

    A representative for Paytm said by email that the effective cost of SoftBank’s 17.47% stake in the company is Rs 800 per share and for Ant Group it’s Rs 330 per share, declining to comment further on valuations. The stock closed at Rs 903.05 on Friday. Jack Ma’s Ant is the biggest shareholder with a 25% stake.

    SoftBank and T. Rowe Price declined to comment, while representatives at Berkshire Hathaway and Ant didn’t respond to requests for comment.

    Paytm raised $2.5 billion in its IPO, which was priced at the top of a marketed range. Its debut was one of the worst by a major technology firm since the dot-com bubble era of the late 1990s. Pre-IPO investors have a one-year lock-in that expires in November, according to its offer document. Paytm provides digital loans, insurance, wealth management and stockbroking services.

    Warren Buffett is losing money

  • Sebi advises MFs to stop investing in int’l stocks

    The Securities and Exchange Board of India (Sebi) has advised mutual funds investing in overseas securities to stop further investments in foreign stocks to avoid breach of industry-wide overseas limits, two industry executives independently confirmed to Mint on the condition of anonymity.

    Mutual funds can make overseas investments up to $1 billion per mutual fund, with the overall industry limit of $7 billion, according to a Sebi circular of 3 June 2021. The suspension is likely to be temporary and could be revoked once the limits are enhanced by the regulator.

    Following the Sebi directive, the Association of Mutual Funds in India (Amfi) has asked fund houses to stop accepting flows in schemes investing overseas from 2 February. However, existing SIPs and STPs have been allowed to continue.

    Franklin Templeton Mutual Fund released a notice on Saturday announcing suspension of lump-sum subscription, switch-ins, and fresh registration of SIP/STP for its three overseas funds, Franklin India Asian Equity Fund, Franklin India Feeder-Franklin US Opportunities Fund and Franklin India Feeder -Templeton European Opportunities Fund, after 28 January 2021. The fund house temporarily withdrew the notice, but may be forced to reinstate it after the Amfi guidance.

    Sebi advises MFs

  • World food prices ease in Dec, but hit 10-year peak in 2021: FAO

    World food prices eased in December after four consecutive monthly gains but jumped 28% over 2021 for the highest average level since 2011, the U.N. food agency said on Thursday.

    The Food and Agriculture Organization’s (FAO) food price index, which tracks international prices of the most globally traded food commodities, averaged 133.7 points last month compared with a revised 134.9 for November.

    The November figure was previously given as 134.4.

    For 2021 as a whole, the benchmark index averaged 125.7 points, up 28.1% from 2020 and the highest since 131.9 in 2011.

    The monthly index has been running at 10-year highs, reflecting harvest setbacks and strong demand over the past year. 

    With the exception of dairy products, prices for all categories in the food price index eased in December, with vegetable oils and sugar falling significantly, the agency said.

    Higher food prices have also contributed to a broader surge in inflation as economic activity recovers from the coronavirus crisis.

    The FAO has warned that higher food costs in import-reliant countries are putting poorer populations at risk.

  • IPO-bound Delhivery announces investment in Falcon Autotech

    IPO-bound logistics service Delhivery has announced its investment in Falcon Autotech, a logistics automation solutions provider. This is in line with Delhivery’s stated objective of sustained investments in future-ready hardware solutions in its operations.

    The amount invested is undisclosed by both the firms.

    With this partnership, Delhivery expects to work closely with Falcon Autotech to design and implement new automation solutions for transportation and warehousing operations.

    The partnership will also enable the bundling of the hardware automated solutions along with Delhivery’s SaaS platform, one of the proposed growth verticals for Delhivery in the national and international market.

    Delhivery (including Spoton) already operates 20 automated sortation centres, 124 gateways, and 83 fulfillment centres across India as of June 30, 2021.

    Commenting on the investment, Ajith Pai, Chief Operating Officer, Delhivery, said, “The collaboration with Falcon Autotech strengthens our ability to drive greater speed, precision, and efficiency across our business lines.”

    Naman Jain, Chief Executive Officer, Falcon Autotech, added, “We are delighted to welcome Delhivery as a partner to Falcon. This investment is a testimony to Falcon’s commitment to our customers, our design, technology, and delivery capabilities, and the product roadmap ahead.”

    A month ago in December, Delhivery had acquired Transition Robotics Inc, a California-based company focused on developing unmanned aerial system platforms.  The deal would help strengthen its capabilities in a wide range of applications, including aerial photography, remote sensing, inspection and surveys.

    Delhivery on November 2 filed its documents with the market regulator, seeking to raise a billion dollars in an initial public offering.Delhivery IPO will consist of primary issuance of Rs 5,000 crores which the end-to-end supply chain unicorn will raise via public issue. The offer for sale by the existing investors will be to the tune of Rs 2,460 crores. It will mark a lucrative exit for many of its investors.

  • Reliance Retail picks 25.8% stake in Dunzo for $200 million

    Reliance Industries Ltd’s retail arm has invested $200 million (around ₹1,488 crore) in Bengaluru-headquartered Dunzo as it looks to get a foothold in the country’s rapidly growing market of quick delivery.

    With the investment of $200 million, Reliance Retail will own 25.8% stake in the online delivery platform on a fully diluted basis.

    Existing investors Lightbox, Ligthrock, 3L Capital and Alteria Capital also participated in the latest funding round that was led by Reliance Retail Ventures Ltd.

    “With an investment of USD 200 million, Reliance Retail will own 25.8% stake,” the statement said.

    In addition to the funding, Dunzo and Reliance Retail will also enter into certain business partnerships. Dunzo will enable hyperlocal logistics for the retail stores operated by RRVL, further adding onto Reliance Retail’s omni-channel capabilities.

    Dunzo will also facilitate last mile deliveries for JioMart’s merchant network.

    The capital will be used to further Dunzo’s vision to be the largest quick commerce business in the country, enabling instant delivery of essentials from a network of micro warehouses while also expanding its B2B business vertical to enable logistics for local merchants in cities across the country, the statement said.

    “We are seeing a shift in consumption patterns to online and have been highly impressed with how Dunzo has disrupted the space. Dunzo is the pioneer of Quick Commerce in India and we want to support them in furthering their ambitions of becoming a prominent local commerce enabler in the country,” RRVL Director Isha Ambani said.

    She added that through the partnership with Dunzo, the company will be able to provide increased convenience to Reliance Retail’s consumers and differentiated customer experience through rapid delivery of products from Reliance Retail stores.

    “Our merchants will get access to the hyperlocal delivery network of Dunzo to support their growth as they move their business online through JioMart,” she said.

    Dunzo is a leading player in the quick commerce category which has an addressable market opportunity of over USD 50 billion.

    At present, Dunzo is available across seven metro cities in India and the additional capital will be used to expand the quick commerce business to 15 cities, the statement said.

    Dunzo launched its instant delivery model ‘Dunzo Daily’ in Bengaluru earlier this year, which is seeing over 20% week-on- week growth.

    The Dunzo Daily model delivers daily and weekly essentials within 15-20 minutes, with a focus on providing high quality fruits and vegetables.

    While traditional e-commerce deliveries take a day or longer, quick commerce (or q-commerce)

    enables customers to get small quantities of goods to customers in a shorter period of time.

    According to a RedSeer report, the quick commerce sector in India is expected to grow to USD 5 billion by 2025 from the current USD 0.3 billion.

    The report said quick commerce is growing in India on the back of trends like a shift in consumer behaviour, entry of big players like BigBasket and Blinkit , and rise of instant delivery platforms.

    Last month, food delivery platform Swiggy announced an investment of USD 700 million (about ₹5,250 crore) in its express grocery delivery service, Instamart.

    Previously, Ola had also started piloting a quick delivery service for items like groceries in Bengaluru.

  • Sensex reclaims 60,000 mark; FPI buying, macroeconomic data buoy sentiment

    The Sensex reclaimed the 60,000 mark after seven weeks, despite rising Covid-19 cases, as the benchmark indices closed higher for the fourth straight session on Wednesday.

    Inflows from foreign portfolio investors (FPIs), expectations of good quarterly results, and optimism triggered by positive macroeconomic numbers enthused investors. The Sensex gained 367 points, or 0.6 per cent, to close at 60,223, while the Nifty rose 120 points to end the session at 17,925 cent.

    After being net sellers for about three months, FPIs have again turned net buyers since the beginning of this year. Analysts said FPIs had become net buyers because India had managed to keep Omicron under reasonable control so far, and that there was still hope for economic revival remaining unaffected. On Wednesday, FPIs bought shares worth Rs 336.8 crore, provisional data from the exchanges showed.

    “FPIs tend to buy in a concentrated manner. That’s the reason the market is showing resilience. The positives have been factored including the revival of the economy. Valuations don’t stand out. India has dealt with the Omicron variant slightly better than others. If the Omicron crisis does not warrant a strict lockdown, economic performance could continue. It’s a relative play as of now,” said U R Bhat, co-founder, Alphaniti Fintech.

    “In December itself, there was some impact of Omicron, but still GST (goods and services tax) collections have been reasonably good. It is possible to argue that the economy is quite resilient,” added Bhat.

    However, some analysts said concerns about the pandemic, rate hikes, and inflation could weigh on the markets in the days to come. Amid surging Covid-19 cases, weekend curfew has been imposed on the national capital, and the mayor of financial capital Mumbai has said tighter restrictions might be necessitated if cases continue to rise. Hong Kong on Wednesday announced flight bans from eight countries, including India, and tighter restrictions on public gatherings.

    Moreover, the US Federal Reserve is moving ahead with its plans to withdraw its bond purchases and hike interest rates at a much faster pace than expected.

    “The market trend might be volatile in the near term because of potential risk from the Omicron variant, upcoming Budget, and fragile global cues. In the long run, strong earnings delivery along with positive macroeconomic data would hold the key to drive the markets upwards,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services.

    The market breadth was slightly positive, with 1,786 stocks gaining and 1,606 declining on the BSE. As many as 527 stocks were locked in the upper circuit, and 432 hit their 52-week highs. Close to two-thirds of the Sensex constituents gained. HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and Bajaj Finance contributed the most to the index gains, rising 2.3 per cent, 1.9 per cent, 3.7 per cent, and 4.4 per cent, respectively. Banking stocks gained the most and its sectoral index gained 2.4 per cent on the BSE.

  • Stick to your investment plan even if market is volatile, says Ajay Tyagi of UTI AMC

    Ajay Tyagi, Head of Equity at UTI AMC has advised that new age investors have to avoid timing the market, have an asset allocation plan, follow this plan systematically and stick with it even when things look volatile in the short run.

    Investors trying to change their investment strategy every now and then to make quick money or chase momentum will never be able to create sustainable wealth, says Tyagi who has more than two decades of experience. He manages UTI’s flagship equity scheme in India and is also the Investment Advisor to UTI International’s range of India dedicated offshore funds.

    He expects India to continue trading at a premium to other emerging markets. “The reason for this is India’s long term structural growth, strong demographics, thriving democracy and a very vibrant stock market.”

  • AI firm Fractal becomes second unicorn in 2022 with $360 million investment from TPG

    Fractal, a US-based artificial intelligence firm, becomes the second unicorn in 2022 with the latest investment of $360 million from the private equity firm TPG Capital Asia. The funding will close by the first quarter of 2022.

    With the latest investment, the company’s valuation has exceeded $1 billion, according to industry sources. Mamaearth, valued at $1.2 billion, was the first unicorn in 2022.

    After Mu Sigma, this is the second firm in India in the pure-play analytics space to reach the unicorn status. This also comes at a time when the analytics space is gaining huge interest from investors. For instance, Chennai-based LatentView Analytics saw a huge response for its IPO last year.

    Fractal was founded in 2000 in Mumbai and established its base in the US in 2005 by five people including group CEO Srikanth Velamakanni and Pranay Agrawal, CEO. It employs 3,500 people across 16 global locations, including the United States, the UK, Ukraine, India, Singapore, and Australia. Fractal’s products include Qure.ai to assist radiologists in making better diagnostic decisions.

    As part of the transaction, TPG’s Puneet Bhatia and Vivek Mohan will join Fractal’s board of directors. All current directors including Gavin Patterson, Rohan Haldea, Shashank Singh, and Gulu Mirchandani will continue to serve on the company’s board.

    Pranay Agrawal, Co-founder & CEO, Fractal, said in a statement, “The demand for AI is surging across the enterprise. Our AI solutions and products, along with our globally recognised team of experts, empower these organisations to realise and maximise their full potential. As we continue to build upon this foundation, the investment from TPG will accelerate our ability to scale and meet this rising demand globally.”

    Srikanth Velamakanni, Co-founder and Group CEO, Fractal, said in the statement, “TPG capabilities across all our markets and their proven success in building and supporting top AI providers is the perfect complement to the partnership we have enjoyed with Apax, whose insight and expertise have been instrumental in accelerating our growth.”

  • India’s 2022 steel consumption seen strong amid muted prices, infra push

    The government’s thrust on infrastructure, coupled with an increase in demand from the construction, engineering, and other sectors, is expected to push up domestic steel consumption in 2022, according to brokerages and rating agencies.

    The country’s consumption is expected to jump to 111 million tonnes (mt) in calendar year 2022 (CY22) after a severely impacted CY20, which saw steel consumption falling to 89.3 mt, CARE Ratings said in a recent report.

    India’s steel consumption numbers for CY21 could be around 104 mt, which would mean a 17 per cent increase from last year. Between April-November 2021, the consumption was 66 mt, up from 55 mt in the corresponding period of 2020.

    The US recently announced a $1-trillion infrastructure spending, which could substantially boost the country’s steel consumption, thereby keeping steel prices firm in the US market, brokerages said.

    On the other hand, China, the world’s largest consumer and producer of steel, due to continued production curbs to curtail carbon emissions, has tapered exports, in turn keeping world export prices at elevated levels, they said.

    Apart from the production and consumption equation of steel, supply chain performance and logistical arrangements are expected to play a crucial role in 2022 amid the ongoing pandemic, industry officials pointed out.

    “Companies and countries across the globe have taken measures to strengthen their logistics but no one knows whether what has been done is enough. That would only be clear as we walk through 2022,” said a senior official with a primary steel producer on the condition of anonymity.

    Between financial years (FY) 22-25, a total crude steel capacity of about 25 mt is likely to be added to the domestic market. Of it, 7-8 mt would come in during FY22, while the remaining would take another 2-3 years to get commissioned. Due to this, though domestic consumption is likely to be stronger for 2022, compared to previous years, prices may remain slightly muted, brokerages said.

    In December, domestic hot-rolled-coil price in traders’ market slipped further (1 per cent week-on-week) to Rs 65,590 per tonne, mainly due to subdued domestic demand, particularly for flat products, an Edelweiss report said.

    “In Q3FY22, we have also seen increased pressure on domestic prices as export realisation is again at a discount and demand in the Southeast Asia region has remained lacklustre due to re-emergence of Covid cases. Alongside, the recent uptick in Chinese domestic prices raises hopes of a positive rub-off on the domestic market,” the report added.