Discover more from Filter Coffee ☕
2020, that you? 📞
Digital gifting, LIC’s progress, and NFT consolidation kicks off.
Gm coffee gang! 👋
Summer is just around the corner. Temps are gradually starting to rise, but so far the portfolio is cold AF. Market action has moved from sexy growth stocks and YOLO trades, to boring ‘ol commodities and cyclical ideas. Value investors are grinning.
Meanwhile, back in Ukraine, the mess continues. The US just passed a ~$13 billion relief package for the country, to support refugees and fund purchase of arms. But Biden has made it amply clear that NATO, at any cost, won’t fight Russia directly — unless Putin moves further west. Anyway, news wise, it's an easy day. Let’s hit it. 🤙
Kicking off the week ☕
🤦 China is dialing 2020 — the Chinese have enforced a lockdown on millions of people on Sunday, as active COVID cases nationwide doubled to 3,400, the highest since the last 2 years! Ever since the virus broke out, the spooked-Chinese have adopted a zero-tolerance policy, which folks outside have called a bit crazy, but have served the local agenda pretty well. Regardless, news like this could spook the markets on Monday for a bit, adding more to the volatility.
💸 Money printing goes brrrrrr — the Americans passed another $1.5 trillion spending bill over the weekend to keep its government funded. The package most notably includes $13.6 billion in foreign aid which will be wired directly to help Ukraine fight the war. About $4 billion of that has been set aside to help Refugees settle, get healthcare, travel to EU and to the US, and another $3-odd billion will go to fund arms. Meanwhile, a US journo and filmmaker was killed covering the war last night, which is adding a fresh dimension to things.
Line to go public in 2022 is getting longer 🙌
What’s poppin’ — Ebix Cash, the India-arm of the global tech giant called Ebix Inc., filed its docs with SEBI to raise ₹6,000 crores from the public markets — joining a growing list of tech names set to visit Dalal Street.
Some context: Ebix Inc., which mostly deals in supplying software to old school services-industries like Payments Processing and Insurance, entered India in 2017 after acquiring Itz Cash from the Zee Group. To remind ya GenZ folks, Itz Cash was actually a top player of prepaid cards in India — think preloaded enterprise spending cards, or gift cards for retail consumers.
Anyway, Itz Cash became Ebix Cash, and since then the company grew aggressively via M&A — buying 10+ companies within financial services, education, forex, travel and insurance.
Today the company has its tentacles into online travel booking, payment processing, remittances, gift cards, and other consumer services, but also into BPO services, bulk travel bookings, and money transfers for large corporations. The list goes on.
Their retail products are sold through a brick-and-mortar network of 650K+ third-party vendors, spread across 75+ countries! For the year ended in March 2021, the company grew revenues almost 91% YoY to ₹4,100+ crores, while profits of ₹230 crores stayed flat.
Bottomline — ain’t exactly a digital play, but given the state of the market, investors looking for a balance of old-school + new would be intrigued.
Temp check on some Weekend Raises 💰
What’s poppin’ — Ferns N Petals, one of India’s largest online gifting platforms, closed a $27 million round from PE shop Lighthouse Funds.
The 28-year-old business, which basically started as a flower shop in the bazaars of Delhi, expanded via a franchise model nationwide, selling flower arrangements of all sorts. Over the last few years, they made an omnichannel pivot — adding categories along the way from cakes, to gifts, to chocolates, and other personalized gifts.
Today they run a vibrant online store coupled with a network of 400+ stores across the country, catering to 2 million customers, and churning ~₹600 crores in annual sales.
Fresh funds will be put to improve tech, fund expansion in the middle east, as well as expand into categories like liquor retailing. We’d done a thread on the company’s rise a while ago.
How’s that insurance selling? 🔥
LIC reported its financials for the last quarter of 2021 — and with the IPO looming on the horizon, the results are getting some extra attention.
Overall, the business performed pretty well — with flat growth in revenues despite Omicron challenges, and rising profits.
Quick look at the key numbers: 👀
LIC collected a total premium of ~₹98K crores during the quarter, up 0.8% YoY
Profits for the quarter came up to ₹235 crores, from almost break-even the same time a year ago.
Premiums collected from new customers grew 10% YoY — to ₹8,748 crore
Profits actually grew because GOI had recently modified LIC’s structure to distribute 10% of surplus money it earns among shareholders. Fyi, this is one of the series of changes in governance done by the company so that it operates somewhat on-par with other private insurance companies in India, and investors find it attractive.
In insurance, surplus distribution is basically a process where companies split and distribute the income from their investments between shareholders and policy holders.
Worth noting — for several reasons, including the boom in consumption of insurance sold digitally, LIC saw a 6.6% decline in market share over the year, with total share now standing at 61.4%. Investors are gonna note that.
Closing out — Bored Apes marry Crypto Punks 🤝
What’s poppin’ — Yuga Labs, the creators of the popular NFT-collection, Bored Ape Yacht Club, has acquired 2 other notable collections — Crypto Punks and Meebits from another company called Larva Labs.
That would be the first big consolidation in the NFT space ever since the buzz took off.
The 5-year-old Crypto Punks collection is actually one of the gold standard projects in the space, adding up to about $2.2 billion worth of trading volume to date, second to only Bored Ape Yacht Club. Deal amount wasn’t disclosed, but it’s likely over $100 million+ in digital property exchanging hands here.
Bottomline — sounds like a bunch of gibberish, we know, but new companies are being formed, operated, run, and acquired on these emerging beliefs. Watch closely, or risk ignorance!
What else are we Snackin’ 🍿
🤷♂️ Gotta go digging - India’s biggest steel company, Tata Steel, is looking at alternative markets to import coal from. The company currently buys up to 15% of its coal from Russia, and is wary of downstream risks.
😔 Pullout game strong - FPIs pulled out ₹45,608 crores from the Indian markets in March, continuing the selling spree for the 6th straight month. Paper hands!
🚫 Putin escorts Zuck out - Russia will ban Instagram today, a week after banning Facebook in the country.
Hit that 💚 if you liked today’s issue.
You can forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀