Middle East 🚨
New IPOs, Paytm's Payout, and Leadership Shift.
☀️ Morning, Monday is here!
🤖 OpenAI thinks AI value prop is so high, companies will pay $200/month for a pro plan. That’s one way to recover the billions spent on chips.
📈 Markets worldwide look strong — rebound rally in the Nifty that kicked off last week of November appears to still have momentum. That was also the day FC resumed coverage, just saying.
Let’s hit it!
1 Big Thing: Syria Has Fallen 🇸🇾
Rebels seized control of Syria, ending a decade long conflict to oust the country’s dictatorial leader and president, Bashar Al Assad.
Assad, along with his family, fled the country and is now known to be taking refuge in Moscow, Russia.
Backstory: the Assad family has ruled Syria for over 50 years, against violent opposition by various local political and religious groups. Bashar inherited the office from his father at the age of 34, and for a while was looked at as a beacon of change.
But he extended his father’s legacy, taking extreme measures to retain control for the family. Civil war broke out in 2011, and since then nearly 500,000 Syrians have died, with half the country displaced.
Context:
Under Assad, Syria also took an anti-Israel stand, which makes him not so friendly to the Americans.
He was pretty close to the Russians and Iran, who supported Assad throughout to keep the rebels under control.
Here’s incredible coverage from India Today for those looking to dive deeper.
Looking ahead: the rebels are now rejoicing, citing end to years of brutal rule. But toppling a leader and running a state are two different things.
Whether the rebel groups can unite to form a government is to be figured out. It is a big ask.
Big picture: the global geo-political landscape continues to worsen, particularly in the middle east. For example, Israel, which shares a border with Syria, took the opportunity to get into Syria and fight the rebels to stop expansion.
Worth noting: India asked a few hundred nationals in the country to immediately leave Syria. Mostly diplomats or blue collar workers. FYI, India did enjoy positive relations with the nation.
2. Another mega IPO 🚀
LG India, the local subsidiary of the South Korean electronics giant, has filed documents to go public—looking to raise ₹15,000 crores.
This would be one of the largest bids of the year after Hyundai India’s IPO of ~₹27,000 crore in October, and the 5th largest IPO ever.
Morgan Stanley, J.P., Axis and a few others are managing the bid.
The IPO is entirely an offer for sale, which means LG Electronics India won't receive any proceeds they raise from the public.
This highlights how hot the IPO market has become. Indian investors are eager for a stake in quality businesses, while large private corporations are leveraging the dynamic to their advantage and selling stock.
Yes, but: LG’s fundamentals are strong. It is a household brand, and has managed to hold share and relevance in a tightly competitive market. For FY24, they made over ₹21,000 crores in sales in India.
Zoom out: India’s appliances and electronics market is worth over $86 billion, and is expected to grow at a 12% CAGR through the decade. Investors looking to get exposure to the expanding India middle class story could love the bid.
While we are on IPOs:
MobiKwik has filed its DRHP with SEBI to raise ₹572 crore. This is the third time the company has tried to go public, at repeated lower valuations.
Funds will be used to grow its financial services, payments business, and R&D in AI and product tech. The IPO opens on December 11, with a price band of ₹265–₹279.
3. Paytm’s asset offload 📱
Paytm will sell stake in PayPay, a Japanese payments company, to SoftBank for roughly $280 million, as the company continues to get rid of assets that aren’t part of its core offering.
With 38 million users, PayPay is the largest mobile payments app in Japan.
What matters: this isn't the first time Paytm has offloaded assets. In August, the company had sold its entertainment ticketing unit to Zomato for $246 million.
Worth noting: this has been a rough year for the company, which was blocked for nearly 8 months by regulators from adding new users for its UPI service due to poor compliance practices.
The sale will help boost Paytm's cash reserves to $1.46 billion, which is invaluable as the firm defends share in India's cutthroat payments market.
Also, Paytm reported its first quarterly profit in September, largely due to proceeds from asset sales.
Big picture: these moves further help shore up investor confidence. Stock has had an epic ride for the past year.
Pop quiz of the week ⚡
This company develops and builds wind farms and wind turbines. It has a ₹91,000 crore+ market cap, and stock has returned over 3,000% in the past five years. Which company is this?Answer to last week's quiz: V2 Retail.
What else are we snackin’ 🍿
🚨Leadership shift: Nykaa Fashion's Nihir Parikh has stepped down as CEO with immediate effect. He will continue to contribute to the company as a member of its board.
👋No sale here: Unacademy has shut down rumors of an $800M sale to Allen, reaffirming its commitment to long-term growth and independence.
🔫Martial law mess: South Korean prosecutors arrest ex-defence minister Kim Yong-hyun over his role in President Yoon Suk Yeol’s brief martial law declaration.
That’s a wrap! Don’t let the Monday blues get to you.
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