Demerger 🛎️
More IPOs, Solar win, Big venture bid.
☀️ Morning, it’s Wednesday!
📈 Markets took a sharp turn yesterday. Sensex finished down 1.3%. The S&P lost 0.3%.
🤝 The choppiness comes from the ongoing U.S. Fed meeting, with one last interest rate cut expected for this year.
Let’s hit it!
1 Big Thing: ITC hotels set to demerge 🛎️
ITC finally announced it will officially spin out its coveted hotels business as a standalone unit on January 1st, 2025.
What matters: investors have long awaited this move, which aims to separate the more attractive hospitality business from ITC’s slow-growing tobacco as well as FMCG segment.
Quick snapshot of the Hotels business:
• Operates nearly 140 properties across India, with 13,000 keys under six distinct brands
• 45% of the rooms are owned, while 55% are managed
• The business generated ₹3,103 crore in sales and ₹765 crore in operating profit
Investors who hold 10 ITC shares will receive 1 share of the hotel business when the demerger goes through.
Zoom out: several major hotel IPOs set to launch in the coming months, including Leela, Ventive, and Brigade Hotels.
Big picture: India’s upscale hotel market has been booming post COVID. Nearly $3 billion will be spent this year, with growth expected to remain elevated through 2030.
2. Anil Ambani’s solar win ☀️
Reliance Power, led by the other Ambani brother, secured a surprise contract to develop one of India’s largest solar plants and energy storage systems.
The deets: awarded through the Solar Corporation of India, the contract covers the buildout of a 930MW solar plant, along with a 465MW battery storage system.
SECI will sign a power purchase agreement with Reliance for 25 years.
The deal will place Reliance Power at the center of the country’s renewable energy push. Stock rose ~2% initially but was pulled lower by the broader market, though it’s up a solid 94% in 2024.
Big picture: Nearly 16% of India’s total electricity comes from solar power today, which has grown nearly a 1000 times since 2010. The opportunity is incredible.
3. Aye Finance will go public 💰
Small business lender Aye Finance, which is backed by companies like Google, filed documents for a $171 million IPO in India.
What do they do: Aye loans money to small and medium businesses, who are typically underserved by traditional banks. In addition to a digital operation, they run nearly 500 offline centers countrywide.
• The company has a loan book of roughly $588 million
• Revenues for the last year topped $122 million.
• Last known, the company was valued at roughly $400 million.
The company’s non-performing assets did grow to 3.29% last year—a trend markets are unlikely to be forgiving towards.
4. Venture market continues to be busy 🧳
Mili, an AI startup helping U.S.-based financial advisors better serve their clients, has raised a $2 million seed round led by Chiratae and BoldCap. The company is building an AI-powered assistant to help advisors and wealth managers handle client relationships, allowing advisors to focus on managing money.
Seekho, a short-video based learning platform, raised $8 million in its Series A round led by Lightspeed. Think of Seekho like reels, but with a focus on topic-specific content for users looking to learn something quickly and not just get entertained. Fresh funds will be put towards further expansion in Tier 2 cities.
In a major global deal, Databricks raised nearly $10 billion for its Series J, at a $62 billion valuation— in what would be the largest venture round in history. The data warehousing company is helping enterprise feed Gen AI models with proprietary data, which is helping power its growth. They’re currently at a $3 billion+ revenue run rate, growing 50-60% YoY.
What else are we snackin’ 🍿
💥 Threads, alive? Meta says Threads now gets 100 million daily active users and 300 million monthly active users.
🎥 Video push: Google DeepMind is getting into video generation, with the launch of Veo 2, a next-gen AI model that promises impressive video creation capabilities. The effort is meant to take on Open AI’s Sora.
🛵 EVs to deliveries: Ola is taking a page out of the Uber playbook in the U.S., and piloting quick food delivery in select Bengaluru areas via ONDC. The orders will be delivered in under 10 mins.
That’s a wrap! Don’t let the Weekday blues get to you.
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