Jet dressing up ✈️
Apple got problems, Swiggy's grocery plans, and Grab goes to the Nasdaq.
Market summary: 📊
Couple straight days of gains in India, as we recover points lost to early Omicron scare. US had a decent day as well, but tech continues to be out of favor.
US:
S&P 500 - up 1.42%
Nasdaq - up 0.71%
India:
Nifty 50 - up 1.37%
Sensex - up 1.35%
What’s brewing hot? ☕
1️⃣ Expanding base — the pandemic’s push for digitization added almost a billion more internet users around the world — bringing the world’s internet connected population up to 4.9 billion. Yet, nearly 37% of the world’s population hasn’t been online even once — most coming from still-developing nations lacking access. From Google and Meta with sea-cables, to SpaceX and Starlink with satellite internet, connecting these folks is a huge opportunity for big tech rn.
2️⃣ Apple’s feeling shaky — Apple is slowly inching on a $3 trillion market cap — but waning iPhone demand is threatening to cut the rally short. Bloomberg says Apple has told its suppliers to expect a cut back on orders because the iPhone 13 isn’t selling as fast as expected. FYI, Apple had just about a month ago slashed iPhone orders for the year to 80M, from 90M, due to chip shortages. Can’t blame customers who honestly can’t even tell any material difference in 12 and 13. 🤷♀️
Another lousy news day folks, with a couple important things here and there. Let’s roll 🤙
Jet Airways places big orders 🛬
What happened — in the hands of new owners and plotting an early-2022 comeback, Jet Airways is now talking to Boeing and Airbus to buy 100+ planes for its new fleet, in a deal worth $12 billion!
Post-bankruptcy, Jet is left with a tiny fleet of just 11 planes, most of which are old, need upgrades, with a couple more years of life left on them at best. So the consortium of Kalrock and Murari Lal Jalan, who bought the airline out of bankruptcy, are moving to sell off the fleet and start fresh.
Boeing and Airbus, both major airline manufacturers, are back-ordered into a couple of years at least, but Jet had a pre-blow up deal with Airbus in like 2018, which the new owners will try to revive.
Big Picture — India’s post-COVID airline market is becoming a lot more cutthroat. There’s all the current airlines, there’s Tata consolidating their play (Vistara, Air Asia, Air India), there's Jhunjhunwala's Akasa, and then Jet.
Swiggy out with the big guns 🔫
What happened — Swiggy is doubling down on grocery delivery — investing a massive $700 million into its home-grown instant grocery delivery service, Instamart.
Metro-consumers, who got a taste for 15 min grocery-delivery during lockdowns aren’t willing to go back, so competition within quick-commerce as been intensifying. Zepto raised a mammoth round recently to run a network of dark stores. Zomato secured its play via big money infused into Grofers. There’s even a new service coming up called Dhoom. Swiggy had to play.
FWIW, Instamart has expanded to ~18 cities, servicing about a million orders weekly, with annual GMV set top $1 billion.
Worth mentioning — global pioneer of grocery delivery, Instacart in the US, does about ~$35B in volumes a year. Long way to go for Swiggy, but promising start for sure!
Quick status update on the Reliance Capital fiasco 🧐
RBI took control of the now-defunct Reliance Capital a couple days ago. Yesterday, RBI finally asked The National Company Law Tribunal to kick off bankruptcy proceedings so that RCap’s lenders can be paid off.
Quick refresher — Reliance Cap, founded by Dhirubhai, and then managed by the other not-so-savvy Ambani brother, was like the 5th largest financial services play in India, dealing in insurance, investment products, lending, the whole spread.
But then the shop went belly up when Junior Ambani’s other businesses began going defunct, and RCap, which had extended loans to them, started running dry on cash — unable to make true on its own dues. The shit-show eventually ended in ousting of Reliance Cap’s board, and the RBI babus taking over.
Anyway, RBI is now concerned with liquidating assets on RCap’s books, to pay off some ~₹27,000 crore in dues the company owes.
Closing out — Singapore’s biggest startup, Grab, listed on the Nasdaq 🏛️
The ride hailing and payments super-app from Singapore, was listed on the Nasdaq today — via a SPAC-merger deal, that value the company at $40 billion.
Grab has been the top success story in South East Asia, which started off as a cab-booking service in 2012, and then adding food delivery, payments to become a “Super App” serving more than 25M monthly active users, across 465 cities in 8 countries.
Business was ruffled by COVID, but the platform still processes over $12 billion in annual volumes — in commerce, payments, and ride hailing.
Big Picture — western investors running out of China will be keen on betting on other Southeast Asian stories, where the opportunity is still wayyy early.
What else are we snackin’ 🍿
🚗 No other choice - Maruti will hike prices of its vehicles next year, to make up for rising material costs and supply issues.
💰 Cashing out - Binny Bansal sold his Flipkart shares worth $250 million to Tencent during the company’s last fundraise in July. Outta here!
🤡 Keep it, screw it - online retailers in the US are so jam packed, they’re asking customers to keep returned items, even after issuing a refund.
Hit that 💚 if you liked today’s issue.
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