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Governance problems 🚨
Oil still rules, Maruti's EV hopes, and Adani makes a move.
Gm coffee gang! 👋
Hope Holi or St. Patty’s day, whichever you celebrated, was a good excuse to step out of your room and back into civilization.
Alongside spring flowers, the portfolio in starting to bloom too. In India, investors are taking great confidence from the clarity received from the US fed hike, state election results, and the impact of dropping oil prices. Back in the west, growth stocks seem to have found a floor, while defense, commodities, and old-school value-names are emerging clear winners. Anyway, news-wise, it was an easy night yesterday. Lets hit it. 🤙
Kicking off the week hot ☕
🤝 It’s a done deal — India finally pulled the trigger and purchased oil from Putin —about 5 million barrels of crude, despite western sanctions discouraging trade with Russia. The deal happened through the state-owned Indian Oil Corp. Indian authorities tried to underplay the deal as inconsequential, but the US offered a mouthful, with Biden’s press secretary shooting a curt “think about where you want to stand when history books are written” when reporters quizzed her.
🌿 Maruti goes green — Suzuki announced it will spend over ₹10,000 crores in Gujarat over the next few years to support the electrification of the Maruti Suzuki auto empire. Couple of manufacturing plants will be set up, most notably focusing on battery production. Maruti had held out from aggressively going after EVs mostly because the tech is still years away from being cost-effective for Maruti’s budget-consumer to be excited about. But investors were starting to get a bit anxious. This move should help with the narrative.
Venture ambition gets a dose of realism 💁♀️
Another unicorn has found itself on the wrong side of the law. India’s income-tax department is sniffing around for misappropriation of funds and lack of reporting at unicorn venture Infra.Market — which runs a construction focused B2B-marketplace.
Details are scant, but several raids were apparently conducted on 20+ locations of the company and its founders’ homes over the weekend, where a bunch of cash and jewelry was attached.
Tax department is making some serious heavyweight charges — accusing Infra of raising money through hawala network, faking purchase orders, and sliding in unaccounted cash expenses of possibly over ₹400 crores.
Authorities say the company’s executives have acknowledged their faults though, and are actively co-operating.
Worth mentioning — Infra.Market is valued at over $2.5 billion, is backed by Tiger, Accel and some gold standard names, and was in talks to raise at a 2x valuation in a few months. Good luck now!
And then switching over to edtech for a bit, ☝️
Unacademy is taking some heat after Moneycontrol’s latest editorial shines some light into the extravagant lifestyle, aggressive management practices, and blatant anti-competitive moves of its top leadership.
From pompous poker wagers, to expensive jet trips, the piece touches upon all elements on excess you can imagine. Any merit? Who knows! Folks from within the venture world clearly didn't seem too pleased with the writeup.
Bottomline — business in India has historically been viewed through a lens of skepticism, but forward-looking startups were slowly beginning to change that. However, bad taste from mispriced IPOs, fall-out at top ventures like BharatPe, bad lending and data practices, skimping on regulations… the skeptics don’t have to go too far to come up with examples of folly.
Regardless, the pressure for better governance — from investors, stakeholders, and even employees is only going to increase going forward.
Venture Street had a busy weekend 💰
Ekincare, an employee-wellness platform, closed a $15 million Series B round from HealthQuad, Sabre Partners and a couple of others.
Ekincare, like a host of other ventures popping up here after COVID, offers simple, easy to understand health coverage plans to employees — tied with modern day benefits like supporting remote care, offering medicine delivery, digital reporting and such.
The company serves some 400+ companies including ventures like Airbnb, Nykaa and Flipkart, reaching 2 million+ end users at these workplaces.
And then switching over to enterprise AI, ☝️
The UK and India based company sells a tool to governments, independent agencies, political parties to scan social feeds and news outlets to understand the type, volumes, and nature of misinformation being circulated around a particular topic.
Some prominent global agencies are using the platform, and fresh money will go towards testing out new markets, including the US.
Oil still rules, and the Saudis now run the bank 🔥
After hitting rock bottom in 2020 when oil prices had gone to dirt, the Saudis are back to printing cash — as oil shoots to record highs amidst global turmoil.
The state-owned Saudi Aramco, the largest oil exporter worldwide, managed to report a kick-ass 2021, growing its profits by as much as 124% YoY, to over $110 billion.
Other interesting nuggets from their annual report:
$ARAMCO generated free cash flows of ~$107 billion+, 2x over the year
Issued a full year dividend of $75 billion
Jacked up its capex (investment in new facilities) by 18% YoY — to keep milking all that extra demand as the world crawls back to normal
Party not ending soon: Aramco plans on investing heavily to take daily oil production to 13 million barrels per day by 2027, while thanking Russia for offering free tailwinds.
While we’re here ☝️
Rumors are, the Adani Group is flirting for a long term partnership with the Saudis, including tabling the the possibility of Adani buying a direct stake in Saudi Aramco.
Fyi, last year, the Saudis had to walk away from a $15 billion deal they were about to sign with Reliance, basically because oil prices had tanked and Reliance was shifting focus to digital.
However, for the longest time, they have been keen in getting more and more of the India infrastructure growth story. As Reliance gets busy elsewhere, Adani may be slyly slipping in the gaps to orchestrate a win-win.
What else are we Snackin’ 🍿
🤦 Here we go - consumer giants in India are planning on hiking product prices by up to 10% to massage the impact of inflation. Investors rejoice!
🤝 Another merger incoming - GOI is planning to merge state-owned telecom entities BBNL and BSNL this month. In the times of Jio, who cares!
🚗 It's a race- Lexus is planning to launch its electric vehicles in India, hoping to edge out Tesla and deepen its footprint nationwide.
Hit that 💚 if you liked today’s issue.
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