Le green 🌿
Markets pull back, health tech heats up, and vaccines looking good.
Hi 👋, Tanvi here.
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Market watch: 📊
Spoke too soon—Sensex’s 50K goal post is pushed away a bit as bears take control of the wheelhouse yesterday. US markets were closed for Martin Luther King Day holiday.
India:
Nifty 50 - down 1.06%
Sensex - down 0.96%
What’s hot? ☕
✅ Dilli gettin’ all sassy—when a citizen approached the Delhi High Court against WhatsApp’s privacy policy update, the court ripped him a new one. Our friend was told, in clear words, “don’t use it if you don’t want to. It’s a private service, use something else. Even Google map captures all your data”. No clue how to react to that.
✅ From “we’re dead”, to “wait in line, Sir”—India’s auto industry which was staring at a death blow mid-year of 2020, is suddenly so flush with orders that factory lead times now run into months. Mass migration and frozen supply chains had killed everything, but then consumers armed up with all those cash savings from not spending much during lockdowns, and now looking to avoid mass transit are flooding dealers with orders. Quint wrote a cute story.
No mo basics 💪
Cure.fit, India’s foremost health-tech venture, acquired an AI backed fitness startup called Onyx from the valley, which uses 3D imaging to help with daily workouts.
Onyx’s offering is pretty fancy—using just a smartphone camera and some sexy computer vision algorithms, the app creates an image of your body while you workout, with a voice assistant guiding you on form, speed, and energy!
The data is then churned in the back to give you insights on improvement over the longer term. This video of the service is pretty fascinating. Cure fit hopes to use the tech now to build a hardware agnostic platform delivering similar experience to its users.
Bottomline: the health and fitness tech space is exploding—particularly so after COVID with gyms closed, and wearables, at-home equipment, online workout, all flying through the roof. Cure-fit’s game looks top notch against a limitless opportunity here in India where most other platforms are playing catch up.
Low cost services, no fancy gizmos on your body or in your living room, just your phone—this is the kinda offering the fitness-tech industry demands to fuel wider user adoption of the trend!
The Paint-bros make their case 🙌
Another IPO that’s hitting the mills this week is Sequoia-backed Indigo Paints. The colorful Zebra brandishing, MSD-marketed company has come a long way in India’s crowded decorative paints market which is dominated by legendary players like Asian paints.
In addition to decorative pains, the company makes wood coatings, distempers, primers, putties and all the boring stuff.
Quick look at the operational and public raise details: 👇
Grew revenues by about 16% last year to ₹624 crores
Gross margins of ~48%
₹50 crores of profits last year, up 75%—which shows costs are going down considerably
Expects to raise about ₹1,200 crores in the IPO
Here’s Moneycontrol with a thorough read. The company plans on deploying freshly raised capital on streamlining governance, expanding its manufacturing facilities, as well as paying off some petty debt before the rest goes to drive growth.
Lastly, their distribution network across the nation is a key asset here, forming their biggest moat in blocking emerging competition from eating into the ~2% of the market share they own in the brutal decorative pains market of India.
Bottomline: paints may sound boring to you, but the broad narrative stands that as Indians prosper in life, as the youngsters get jobs, and buy bigger homes—the market will slowly but decisively expand. Investors are heavily counting on that.
Net net, with recent IPOs absolutely knocking it out of the park, investors have hopes set pretty high for all these incoming listings.
While we’re on IPOs, ☝️
The IRFC bid which opened yesterday saw the raise subscribed about 65% on Day 1. Honestly, that’s a bit underwhelming compared to some of the raises we’ve seen recently. We’ll see how the next 2 days pan out.
Total securing future with a bet on India 💪
Adani Green Energy will offload 20% stake in the business to French petro-giant Total, in a deal worth $2.5 billion, with the duo teaming up split the spoils on the emerging green energy market in India.
The two companies have been pretty cozy for a couple years now, with Total previously investing in Adani’s Gas businesses, and both co-investing in major projects around liquified natural gas, other domestic utilities.
Strategic move—Adani is targeting 25GW of clean energy producing capacity in India by 2025. He’s already about 25% there—managing some of the largest wind farms and photovoltaic plants. The sale obviously gives him more $$ to further wield his growth agenda, while on the other hand formally brings the century long expertise of the Total Group in the energy game at Adani’s disposal. Pretty smooth.
Takeaway: India’s attempt to move away from coal and to support our energy via clean means is humming along very nicely. Government capital spending here is at all time highs, and deal activity now shows that the markets seem pretty excited too.
This decade should see a lot more capital flowing in and the broad clean energy space as well as consumer and distribution infra projects like EVs, energy storage should see some pretty bright days near term.
Closing out—GOI’s seed fund 👋
PMO surprised over the weekend with a ₹1,000 crore seed-stage fund for Indian startups, handing a quick sentimental boost to India’s entrepreneurial spirit that is already roaring at all time highs.
During the announcement, the government wasn’t shy in tooting its own horn, highlighting moves taken to help the ecosystem since the Startup India pitch back in 2016. But future plans, such creating a debt-based financing facility for capital intensive ventures resonated very well with founders particularly pushing in categories like space infra, EVs, and such.
BTW—PM claims India today has 41,000 startups, and a record 11 claiming the unicorn status in 2020, making us the world’s 3rd largest venture-ecosystem. Quite a feat!
What else are we Snackin’ 🍿
💉 Campaign going swiftly - Over 2 lakh people were vaccinated on the first day of the world’s largest COVID vaccination drive in India. Healthcare professionals and frontline workers are obviously the first group to receive the shot, but broad citizen dosages should pick pace soon.
📱 Reliance bringing commerce on Whatsapp - Jiomart will be doubling down on commerce within Whatsapp, rolling out a thorough service to allow users to place orders for stuff and follow up inside the chat app. Could end up driving some real transactional volumes for Facebook if they push the service hard enough.
💬 RIP Hike - the messaging service which was aimed to compete against Whatsapp has shut down and disappeared from the app store. The startup was valued at over $1.4 billion at one point, but announced earlier last month that its app was going down. No clear explanation was offered. We think without a tight ecosystem of other services, it was tough to monetize perhaps?
Hit that 💚 if you liked today’s issue.
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