Intel made a move 💸
SpiceJet turns a profit, new Blockchains, and Reliance ain't resting.
Market summary: 📊
Putin turned some of his forces around and Indian markets jumped in joy! US had a similarly exuberant response.
US:
S&P 500 - up 1.58%
Nasdaq - up 2.47%
India:
Nifty 50 - up 3.03%
Sensex - up 3.08%
What’s brewing hot? ☕
✈️ Spice jets to life — Spice Jet brought some sparkles to the otherwise beat airline business. The company turned a surprise profit of ₹57 crores for the last quarter (after 7 straight quarters of losses) as COVID’s impact eased up a bit, and festive travel in Oct and Nov picked pace. Few days ago, Indigo had posted similarly strong numbers, which is helping breathe some life into these stocks.
🖥️ Indian IT is winning — global enterprises heavily leaned on Indian IT talent to keep those systems running during the pandemic. As a result, India is expected to add $30 billion+ in incremental revenues, with total IT revenues topping $227 billion for this financial year, per a fresh report by NASSCOM. And despite hiring challenges, 450K new jobs will be added, 44% of which will be taken by women employees! 👏
Intel went shopping 🛒
What happened — last night, Intel spent $5.4 billion on acquiring Tower Semiconductor, an Israel-based specialty chip manufacturing company — as part of an ongoing mission to fix Intel’s growth problems.
Some context — Intel, who historically manufactured and marketed its own semiconductor chips (CPUs, GPUs, Memory, and other stuff) is currently busy turning itself into what they call a contract manufacturer — basically making chips for other companies.
Demand for such services comes from fabless players like Nvidia, Qualcomm, Apple, and countless others — who don’t have any semiconductor production of their own, and basically just dial up other foundries to outsource their needs. Giants like Taiwan Semiconductor (TSMC) make bank serving this demand.
Anyway, Tower is a small but credible player here — whose existing facilities and ~14,000 employees will help accelerate Intel’s plans of contracting. Intel also gets a roster of attractive customers with about $1.3 billion+ in a ready made revenue pipeline.
Worth mentioning — COVID messing up global semiconductor manufacturing has caused huge backlog of orders stretching into years. Golden opportunity at Intel’s disposal to stage its comeback.
While we’re on semiconductors, the local market is hot too 👇
Vedanta announced a joint venture with Foxconn (who makes Apple’s iPhones), to set up a mega plant and make semiconductors in India under GOI’s PLI scheme.
Vedanta had actually announced plans of investing upto $15 billion to make chips in India back in Jan, but folks were a bit confused given their lack of capabilities in key areas. This Foxconn deal helps fix that.
Who raised dough in Venture Town? 💰
Kenko Health, a subscription-based healthcare coverage provider, closed a $12 million Series A from Sequoia, Beenext, and a couple of others.
Kenko is looking to replace (or supplement) insurance with a basic health cover for a fixed monthly fee — allowing people access to physicians, dieticians, tests, the whole spread, without hidden terms. Some 50K+ users across 40+ cities use the service.
Worth mentioning — more than 50% of people of India are not covered by traditional health insurance. COVID alerted folks to its needs, but complicated terms and poor service are still a hindrance. Host of startups are stepping in to fix it.
Meanwhile, there’s a new Blockchain in town ☝️
5ire — a sustainable blockchain startup founded by a couple of Indian guys and some foreign investors picked up $100 million in funding from a little known investment firm called GEM Global Yield.
5ire claims to be the world’s first sustainable Layer 1 blockchain, taking a diss at the energy consumption problems embedded in Bitcoin, Ethereum, and the rest. The company apparently plans on directly working with emerging market governments to power payment apps, with more than a few MoUs already secured. 🤔
Quick look at Reliance’s Satellite deal 🛰️
What’s poppin’ — Reliance signed a $100 million deal with global satellite connectivity provider, SES, to bolster its internet coverage in India.
SES is a pro in the airwaves business, offering broadband internet services, mobile networks, broadcasting services to TV networks and even governments in Europe. It owns a fleet of about 70 satellites.
Reliance plans on utilizing their existing assets, and deploy a few more sats over the next few years — to complement and support Jio’s terrestrial network to plug coverage gaps mainly in rural areas. The duo will basically form a joint venture, with Reliance owning 51%.
Bottomline — hundreds of millions of Indians yet to be onboarded to ultra-fast broadband. Satellite internet, despite its problems like low latency and high costs, can accelerate broad adoption.
Closing out — here comes the profit brigade 💥
Social media was gushing over the business performance of two of the most profitable growth ventures in India, Zerodha and Zoho.
Quick summary:
Entrackr says Zerodha had one of the best years of its life through the pandemic — growing revenues by 190%+, to ₹2,700 crores for FY21, with solid profitability. India’s crazy boom in retail trading helped big time.
And then in software, king Zoho blasted equally phenomenal numbers — pulling in ₹5,200 crores+ in sales, up 22% YoY, and almost ₹2,000 crores in profits, which more than doubled over the year.
Meanwhile, Zomato is down 40% YTD and PayTM 35%. As liquidity and cheap capital dries up, market’s mood seems amply clear.
What else are we Snackin’🍿
📈 Warren King - Berkshire Hathaway apparently purchased close to a billion of Activision stock, right before Microsoft proposed to acquire the gaming company. Uncle Warren still playing his A game.
😂 No farts please - Tesla is recalling 500K cars because they can play fart sounds and goat noises loud enough to be heard outside. Regulators think that’ll distract pedestrians.
👊 Huge deals - SBI Mutual Fund has picked 7 banks to get its IPO done, apparently looking to raise over a billion dollars.
Hit that 💚 if you liked today’s issue.
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