Banks printing cash 📈

Tesla's smol win, Venture raises, and Paypal walks.

Oct 26, 2021

Market summary: 📊

After a painful last week, India thankfully kicked off this week on the right foot. US had a solid session too with anticipation building for the holiday quarter.

US:

S&P 500 - up 0.48%
Nasdaq - up 1.04%

India:

Nifty 50 - up 0.06%
Sensex - up 0.24%

What’s brewing hot? ☕

✅ List of enemies long — everyone’s arming up against Oyo. After Zostel, the Federation of Hotel and Restaurant Association of India approached SEBI to halt Oyo’s IPO over incomplete disclosures. Apparently the association is currently suing Oyo for alleged anti-competitive practices, but Oyo conveniently forgot to call out the legal case as a risk to its ongoing operations in its prospectus. Likely won’t stop the IPO, but a range of similar accusations could force regulators to scan through every line item once again… what a mess.

✅ Tax man cometh — the US congress is proposing a bill that would tax unrealized gains on investments from the wealthy, which has caused a furor in the biz community. Sparing the details, the laws basically allow lawmakers to dip into the pockets of the ultra-wealthy to tax them for “gainzzzz” (for example appreciation in stock value of firms they own) that are yet to be realized. Lawmakers are hoping the extra $$ will help fund the pompous $2 trillion infrastructure spending bill, while anti-taxers are crying the move will eliminate incentives to invest.

Top banks are printing cash 📈

ICICI, India’s 2nd largest private lender, followed HDFC to report a banger of a quarter — with profits, revenues, straight out of the park, landing stock up more than 10% in the market yesterday.

Quick look at the numbers:

ICICI’s interest income was up 25% YoY to ₹11.7K crores — good sign that loan payments are coming through
Profits up an even stronger 30% YoY to ₹5.5K crores
Retail loan portfolio up 20% YoY, showing good strength in consumer spending

More importantly, the bank's bad loans were well within expectations, down some 0.3% to 4.8% of the total loan book. Brokers cheered the improvements, bringing more enthusiasm to the party!

Worth noting —ICICI displaced consumer goods giant HUL, to become India’s 5th largest company by market cap. Thanks to weak performance from the FMCG guys!

What’s poppin’ in Startup Town? 💵

Mondays are reserved for the big raises. Quick rundown…

First, Groww closed a $250 million Series E from Iconiq, Alkeon, Sequoia and a few others — tripling valuation to $3 billion! Stonks may not have put $$ in your pocket (or maybe they did, good for you) but the discount brokers and the fund distributors are making bank. Groww scaled to 15 million+ users, bringing in about $35 million in annual revenue. Gonna have to ramp it up to grow into that valuation tho!

In SaaS, we had Clear (which was previously ClearTax) scoop up $75 million from Kora Capital and Stripe for a Series C, at a $700 million valuation. Clear sells software useful for taxation, invoicing, billing, and other boring financial tasks, making life easy for employees of nearly a million SMEs. Worth noting, Stripe’s getting pretty active in the financial-software space — the company’s India ops had just acquired BLR based Recko last week.

Then there’s always edtech — Teachmint raised a $78 million Series B, co-led by Rocketship.vc and Vulcan Capital at a $500 million valuation. The platform helps independent teachers as well as institutes digitize school-ops and conduct online classes, serving 10M+ users at the other end.

In all, a good day!

Quick look at a mega win for Tesla 🧐

What happened — Hertz, one of the largest global car rental companies, disclosed a deal to buy 100K Tesla cars yesterday, in THE largest EV-fleet purchase ever.

Hertz runs a fleet of 500K cars worldwide, and despite the company having deep relationships with almost every other automaker, their outsized bet on Tesla shows extreme confidence in the company’s wares. Secondly, it opens Tesla to a big enterprise-fleet market with a bang, allowing other companies to pursue similar arrangements.

All of that “potential” helped Tesla stock jump 12% today, breaking through $1T in market cap for the first time. What a ride!

Big picture — its not just the low-cost of operation of EVs that’s valuable to fleet companies, but also Tesla’s software-first approach which makes data gathering, fleet management, tracking, all easier and more efficient.

Closing out — PayPal walks 🤷‍♀️

After giving business news cycles fodder for a week, PayPal came clean — it's not buying Pinterest. PayPal stock promptly jumped 6% on the news, while Pinterest got murdered down 15%.

Independent reports suggest PayPal did hold talks though, offered up to $45B for the company, but couldn’t get Pinterest management too excited.

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What else are we snackin’ 🍿

💰 Gotta pay bills bro - Dream11 will sue Karnataka over an FIR against co-founders that alleges continuing operations even after KA’s online-gaming ban.

🤝 We’ll take it - Airtel followed VI and became the 2nd telco to accept GOI’s four-year moratorium proposal for AGR dues. No shame, all in the game.

Hit that 💚 if you liked today’s issue.

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