Market summary: 📊
Volatile day in India that eventually finished in the green. US saw little action as investors wait around for earnings to roll in starting next week.
US:
S&P 500 - down 0.24%
Nasdaq - down 0.35%
India:
Nifty 50 - up 0.28%
Sensex - up 0.13%
What’s brewing hot ☕
✅ Swallow it — US pharma giant Merck is seeking regulatory approval for a COVID-19 pill, the first of its kind antiviral drug for the disease which could start the crocin-ification of COVID treatment — easy access, lower prices. Unlike a preventive vaccine, the drug is only effective on people who caught COVID, administered in doses of 5 pills for 8 days, which will help reduce severity and the need for hospitalization.
✅ Mo Zo problems — Zo Rooms finally asked SEBI to halt Oyo’s IPO, claiming the company’s capital structure is not final and could change based on the outcome of its pending legal case. Oyo did mention Zo’s legal crusade as one of the risks its business faces in its docs, but Zo’s 98-page letter to regulators alleges a lot more. Guessing if there was any chance of a settlement, we would’ve seen it by now!
Fintech goes full circle 💳
What happened — RBI granted a small finance banking license to a joint venture led by fintech-platform BharatPe and Centrum Financial Services (an old-school lender) — clearing way for the duo to start offering basic banking services.
Some handholding — Small Finance banks are basically a category of banks created in India to help plug market gaps ignored by large banks — servicing loans, offering deposits, and other basic banking services to small businesses, farmers, solo proprietors, and other entities.
Having its own banking license allows BharatPe to supplement its fledging payment processing business with adjacent products in banking, charging more, boosting margins, improving stickiness — all without any convoluted and restrictive partnerships with 3rd party banks.
FYI, RBI has issued this license after almost 6 years. BharatPe has already added former Chief of SBI, Rajnish Kumar, as its Chairman, adding some serious weight to its board.
Bottomline — more and more fintechs are chasing “quasi-banking” models worldwide, securing themselves more clout, regulatory chops, and fatter profits pools — all to fund innovation at the front.
While we’re here, ☝️
Old school finance was flogged — RBI cancelled the NBFC licenses of 6 financial entities for violation from basic laws of non-compliance, poor asset qualities, and other mismanagement.
Quick look at Tata’s Green Deal 🍃
What’s poppin’ — Tata Motors is raising almost a billion dollars from private-equity firm TPG to invest in its newly formed electric vehicles entity.
The size of the check surprised the markets a bit, which will be received over multiple tranches over the next 18 months, conditional on progress Tata’s EVs make. At the end of the infusion, TPG will get a 10% stake in the business at a $9-$10B valuation.
Foreign money’s interest in India’s EV-fication is growing — just recently had Ola Electric raised $500M+ from a clutch of investors from Singapore.
Worth mentioning — thanks to speculation about a looming Tata-Tesla partnership, and then Tata’s own EV ambitions, Tata Motors stock has been through the roof for the past 12 months. *pretending like you’re in*.
Quick look down Venture Street 💰
Bank Open, a neobanking platform, raised a promising $100M for its Series C round from Singapore’s sovereign wealth fund Temasek, with Google and even SBI pitching in — at a $500 million valuation.
Open offers modern, no-fee banking accounts suited for digital businesses and Startups in India — building on top of ICICI’s business banking products. Open has 2 million businesses using its platform and fresh funds will be put towards growth, expanding offerings, and international expansion.
Closing out — 2 KPIs showing economic strength 💪
IMF is bullish on India’s recovery, and reiterated its GDP growth target for India to 9.5% for this year, and 8.5% for the next financial year. Growth targets help major investors benchmark their projections and confidence in the economy. IMF is not too bullish on the global economy however — cutting global GDP outlook by 0.1%, thanks to semi shortages, trade problems, labor issues, and rising fuel prices.
And then, Inflation in India is trending down, thanks to production constraints and supply chains easing up. For September, inflation came in at 4.35%, nearly a 1% monthly improvement, and the lowest it has been since April 2022, when the 2nd wave broke.
Big picture — fundamentals are improving, markets are pumping, and macro-signs look promising. Decent backdrop for earnings season.
What else are we snackin’ 🍿
📈 Numbers going down — India recorded 14.3K new COVID-19 cases, the lowest in 224 days, while the National recovery rate has gone up to 98%.
✈️ Wheels up — Restrictions on all domestic flights will be removed, allowing them them to operate at 100% capacity from 18th October. Lot riding on strong holiday travel!
Hit that 💚 if you liked today’s issue.
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