Leave bijnis alone ✋

Airtel got plans, Square makes a killing, and NSE goes down.

Feb 25, 2021

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Trading was halted on NSE due to a technical glitch, which saw record volumes on the BSE, taking Sensex up decisively. US market returned to growth too, but tech continues to be out of favor.

US:

S&P 500 - up 1.41%
Nasdaq 100 - up 0.81%

India:

Nifty 50 - up 1.86%
Sensex - up 2.07%

What’s hot bruh? ☕

✅ NSE gives stonkers a break—the National Stock Exchange had to restrict trading for most part of the day, after a minor glitch in the exchange’s index feeds. Basically, two major indices that are representative of the broad stock market, the Bank Nifty (banking stocks) and the Nifty 50, stopped updating because of some glitch emerging from the exchange’s telecom network provider. Several other sub indices stopped functioning too and the exchange had to respond by restricting trading, and then running an extended session until like 5pm. Investors clearly weren’t pleased, especially since this isn’t the first time NSE had its systems messed up.

✅ The rebels are bacc—if you thought the market’s recent choppiness and the 80%+ plunge in the prices of some of these meme stocks would deter people, boy are you WRONG. Gamestop again jumped nearly 100% overnight, after the company pushed a major management reshuffle, looking to make the most of the wind it has caught behind its back, plan out an ecommerce pivot for real, and stop the decay of its offline retailing business. But do the stonkers care for that tho? Trading had to be halted mid-day after a 70% pop, and GME’s sister meme stock AMC was up like 20% on the news.

Airtel supplementing its revenue stream 🗼

Airtel’s launching its own ad-tech platform called Airtel Ads, with hopes of incrementally monetizing the hundreds of millions in subscriber base the company has across multiple digital properties, actively diversifying revenue streams beyond its core telecom business.

The platform will basically work with brands, leveraging data that Airtel has on consumers, to deliver brand messaging and offers that are relevant wherever consumers interact with services—through Airtel’s mobile app, its music streaming app Wynk, as well as when users visit the million or so retail locations that Airtel runs. Between all these channels they can easily service over 350 million or so customers, without lifting more than a finger.

The ad engine is ready, and a pilot is already in the running with brands like CRED, Zomato, Cars24 etc. with Airtel claiming revenue bookings of over ₹100 crores by far. Investors seemed thrilled by the news and stock jumped like 5% yesterday.

Bottomline: India’s advertising industry is expected to grow to nearly $20 billion by 2025, and digital ads will continue to own a large part. And as digital innovation in India picks pace, there’s millions of web properties that will need to be monetized effectively.

Prominent platforms including Flipkart have already made moves to get ahead of this game, and if Airtel plays smart, it could secure itself a multi-billion dollar business vertical in due time.

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Birla’s love for ethnic wear 🥻

Barely days after spending ₹400 crores on acquiring a majority stake in designer label Sabyasachi, Aditya Birla Fashion is cutting a fresh deal with another private label owned by designer Tarun Tahiliani.

The nature of the deal is kinda complicated—Birla is acquiring 33.5% of Tahiliani’s fashion label for about ₹67 crores. Birla is then forming a new retailing entity, and owning about 80% of it, which will be exclusively working on launching a new line of men’s ethnic wear guided by Tahiliani.

The game play—Birla is betting big that the Indian consumer has an appetite for a novel ethnic wear fast fashion label, kinda like desi Zara or H&M, priced in the premiumish segment, that’s driven by a strong creative machine at its core, capable of bringing originality and quality to the market at a high speed.

With the right creative talent in place, Birla can then leverage its wide offline as well as online distribution network (aka partnership with Flipkart) to lead an all out assault in bringing the merch to market. It's a genius plan!

Anyway, the new entity formed by Birla will be rolling out 250 more retail locations across the country, and estimates are set for nearly ₹500 crores in revenues in 5 years. Super super ambitious.

While we’re on acquisitions, 💰

Canada’s second largest pension fund called CDPQ was approved to buy a 2% stake in PharmEasy by the Indian regulators. Big money coming from old-school establishments continues to signal the confidence global investors portray in the India growth story.

PharmEasy is actually in the process of raising a $200 million fresh round led by Prosus Ventures, another prominent global tech investor, and valuation will likely top a billion dollars then.

Square carves out another perfect quarter 👏

Jack Dorsey, the CEO of Twitter, also runs a fintech company called Square, which sells payment processing hardware to small merchants in the US, and runs a P2P payments app called Cash (kinda like PayTM). So Square reported its December quarter business performance, and boy was it a cracker!

Revenues up 141% YoY, to $3.2 billion
Cash App revenues grew a massive 502% on the year, thanks to people rushing into buying more Bitcoin using the service
Cash App reports 36 million users, up 50%
Like Tesla, Square bought nearly $170 million of Bitcoin for itself
Total payment volumes crossed $30B in the quarter

Stock has now grown nearly 300% since March lockdowns, with market cap crossing $100 billion.

The performance exemplifies the power of fintech businesses at scale, and the game changing boost they received after COVID enforced rampant digitization of our world.

Also, these successes worldwide continue to highlight how we routinely underestimate the outcomes possible with some of India’s top fintech ventures in a few years.

Closing out—government sucks at bijnes 👋

“The government has no business being in business”—stated the PM yesterday explaining why the government is so keen on selling off public corporations and assets, and setting the tone for another round of offloading nearly 100 or so state run corporations and PSUs, over the next few years.

The move had drawn a lot of heat, with critics claiming that privatization may lead to excess profiteering, price gouging, poor management, and all other perils of capitalism; While GOI is hoping that the lethargic enterprises which have been bolstered for decades by cozy cushions of taxpayer funds, finally see some free-market accountability, and mayyyyy be turn a profit for change.

Regardless, the agenda is set for nearly ₹1.75 lakh crores worth of public assets to be divested during the next financial year (including the Life Insurance Corporation), which also means a bunch of IPOs in the pipeline. Save that salary.

What else are we snackin’ 🍿

☁️ Adani bets on the shift to cloud - the Adani Group will be investing ₹2,500 crores in a data center buildout in Noida, in a joint venture with global data center operator EdgeConneX. This joint venture will see the duo develop and operate several more data centers throughout India, with plans of selling services to Indian enterprises across the board.

Hit that 💚 if you liked today’s issue.

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