Salvador goes all in 😎
Hardware bets, More IPOs, and new iPhone launch.
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Market summary: 📊
India kicked off the day well on Tuesday, but eventually settled down a notch. US had a mixed day, with old school stocks slipping, while growth tech is back in fashion, stretching market tops.
US:
S&P 500 - down 0.34%
Nasdaq - up 0.15%
India:
Nifty 50 - down 0.09%
Sensex - down 0.03%
What’s brewing hot? ☕
✅ Brits agree to a truce — Cairn Energy and India are settling after Cairn agreed to take GOI’s offer of abandoning all legal action for a refund of a $1 billion principal, as part of India dismantling the retrospective tax law. Cairn management had been quick with threats of force-selling GOI’s assets (apartments in Paris and Air India planes etc.), but turns out Cairn’s biggest shareholders, BlackRock and Franklin Templeton, weren't too eager to choose war. Good sense!
✅ Pain in the hood — semi-shortages are seriously threatening to alter market dynamics of auto industry. CEOs of Ford, Volkswagen and Daimler again came out and warned shareholders of delays persisting for at least a couple years (Ford says until 2024, Daimler says worst will come in the second half of this year), squatting on plans of all these car makers to pull EV transformations. Meanwhile, disruptors like Tesla, who painstakingly built electronics-heavy supply chains for the past decade, are sailing through smoothly. You know how it’ll end.
Zoho bets on hardware 💪
What happened — software king Zoho made a rare hardware bet, investing ₹35 crores into BLR-based MRI scanning device maker VoxelGrid.
VoxelGrid makes these indigenously designed Magnetic Resonance Imaging (MRI) scanners that are lightweight and portable, presenting it as a low-cost alternative compared to the bulky setups sold by players like Siemens.
Part of a grand plan — surprisingly, Zoho has been a prolific investor in med-tech ventures with made-in-India tag (put $$ into SignalChip, vTitan etc. in the past).
While fostering local innovation is one motive, perhaps Zoho is also laying the groundwork to pursue its own ambitions in healthcare SaaS and cloud services in India — a ripe long-term opportunity as the entire healthcare value chain rapidly digitizes.
Good day for emerging market crypto 💰
Back home, CoinSwitch Kuber is in talks to raise over $100 million from a16z and Coinbase, doubling valuation to $2 billion, throwing some shade on competitor and recently minted unicorn CoinDCX.
Despite looming uncertainty in India, the crypto market continues to hum along nicely. CoinSwitch says it has a monthly user base of well over 7 million (from 4M in April, WTF?). We see ya’ll.
Meanwhile, El Salvador crashed the market,
The country which adopted Bitcoin as legal tender acquired another 200 coins for $21 million, bringing the total national reserve to 400 coins. When news broke on social media, a rapid drawdown followed. Undeterred, the President announced he’s buying some more.
All of this, live-debated on Twitter. 2021 folks!
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India approves T+1 settlement 🤝
What happened — SEBI okayed Indian exchanges to settle stock transactions 1 day after the trade, if they chose to, heeding to long-time requests of market participants.
Simple breakdown — when stocks are bought and sold, you may be hitting a few buttons and exiting apps, but on the exchange, actual “shares” of companies exchange hands. Now the types of orders processed everyday are extremely complicated — some of these transactions are done on credit, some are loaned-shares, some are MASSIVE orders from large institutions.
It takes time to finally ensure the numbers are tallied, nobody BIG went broke, and that people who are owed cash get cash, and people who are owed shares get shares in their demat accounts.
This process until today was T+2 or had to be settled within 2 days of the trade. Cutting it short to 1 day will hopefully make settlements a bit more efficient. Here’s a simple primer.
What next — SEBI has made the process optional for now, with exchanges (BSE, NSE) choosing to participate based on their own decisions. Some technicalities will need to be figured out, for example, how settlements will be done for stocks trading on multiple exchanges with different schedules.
Closing out — LIC IPO got some haters 🙄
LIC’s employee union is opposing the IPO of the company, warning against rampant job losses and cuts to spending plans and investments, if private parties are brought in to manage the company.
Writing on the wall — well, the very reason GOI has been pushing for these asset diversifications is to bring outside accountability and discipline, cut down wastage, and drive returns on these assets higher. Not unimaginable to have excess fat trimmed which includes job cuts, outsourcing, redirecting investments and a lot more, all in due time.
Anyway, the union represents some 4,000 of the 100K+ employees LIC has. While it may not stall things, certain to get some press mileage.
What else are we snackin’ 🍿
😎 Stage set - Apple announced a live streaming event on Sept 14th for the next iPhone launch.
💰 Emerging markets on fire - ShopUp, a Bangladeshi startup helping grocery stores go online raised $75 million in its Series B round from Prosus, Sequoia, and Peter Thiel.
Hit that 💚 if you liked today’s issue.
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