Steal yo gurl
Adani takes a dump, bets on mental health, and more breaches.
Hi 👋, Tanvi here.
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Market summary: 📊
Flat day in India with the markets mostly busy keeping up with the fire on in the Adani house. US had a weak start to the week as well, but tech advanced ahead.
US:
S&P 500 - up 0.18%
Nasdaq - up 0.93%
India:
Nifty 50 - up 0.079%
Sensex - up 0.15%
What’s brewing hot? ☕
✅ Inflation ain’t stopping for no one — with excess cash in the market and wrecked supply chains, consumer inflation rose for the third straight month this year, crossing 6.3% for the month of May, jumping 2% month-over-month. As far as core goods are concerned, which excludes food, fuel, and light, inflation in other commodities has spiked to the highest since July 2014, blowing past analysts most generous estimates. Regulators are sitting ducks.
✅ Staying compliant — Patanjali Ayurved, the new owners of Ruchi Soya, one of the hottest stocks on Dalal Street for the most of 2020, will sell about 10% of RS to the common public over the next few months to stay compliant with acquisition laws. Patanjali had acquired debt-laden Ruchi, India’s largest manufacturer of edible oil, after the company’s management had basically ran it into the ground, clearing off debt, and listing it for ₹2 per share on the NSE, only to have stock jump to ₹1,500 by end of year. Time to mint some short term $$.
Qualcomm stealing Nvidia’s girlfriend 👀
Radio chip maker Qualcomm is out telling regulators and processor-maker ARM Holdings, that if Nvidia’s $40 billion deal for ARM falls through, then it’d be more than happy to lead a HUGE round into ARM to help the company figure out its problems.
Some context — if you’re reading about this for the first time, last year Nvidia made a huge splash announcing a $40 billion buyout of ARM holdings (which makes low-cost and low-power CPUs found in smartphones, small devices etc.), in what would be one of semiconductor industry’s largest acquisitions.
Nvidia’s ambition was clear — purchase a CPU maker, and then take on Intel by selling complete end-to-end advanced computing platforms that span the entire modern computing stack, to large datacenter buyers (a low cost CPU + AI-specific GPUs to do the advanced math + high speed networking).
But, that ambition is now making global corporations as well as global governments who consume ARM’s products a bit uneasy, that Nvidia may have too much power over the market. Fun fact? 95% of the world’s smartphones use an ARM designed chip.
Going forward — Nvidia has just submitted documents with the Chinese government asking for approval of its deal. The UK has already expressed its problems. Now Qualcomm’s offer adds more weight to the anti-Nvidia camp.
And if the deal falls through, NVDA stock will likely be hammered into the ground.
Adani takes a $6 billion dump 💩
What happened — Economic Times broke news that nearly ₹44K worth of stock in the Adani Group of companies owned by 3 Mauritius based funds had been frozen by the NSDL acting upon SEBI’s directive, apparently due to lack of compliance with anti-money laundering laws.
Moment the markets opened, Adani enterprises stock was hit hard, down 15% at one point.
Unless you’ve been hiding under a rock, you’re aware that stocks part of the Adani Group have been on an absolute tear over the past year or so — Adani Enterprises up 970%, Adani Green up 260%, Adani Power up 300%, all making CEO Gautam the second richest man in India. Now shrewd investors knew this party has gone a lil too far, but nobody expected the club to freakin explode.
ET’s details were hazy, but specifically the 3 funds did not comply with the market regulator’s revamped KYC norms which were brought in Oct 2020, and refused to offer details on employees as well as investors into the fund.
But, by mid afternoon, Adani cleared the air with a staunch rebuttal of the news, and stock pared some of its losses ending the day down only 5%. There is no confirmation from NSDL or SEBI.
Bottomline — hard to judge the “truth” without the regulators opening their mouths, but either ET becomes the dumbest publication to put its reputation on the line for some clicks, or this party has ended and it's time to go looking at other stocks down the street. In any case, volatility will persist.
Quick look down at venture street 💰
Glance, the content distribution platform by house-InMobi, acquired social commerce platform Shop 101, marking formal entry of the InMobi empire into ecommerce. Deal size wasn’t revealed.
Shop 101 basically makes it easy for individual resellers to open online stores and find products, which they can then sell to friends and family, leveraging the power of their own social networks. 10 million people use the service, which has nearly 10,000 suppliers. Glance hopes to add Shop 101 to solidify its short-video service Roposo.
Bottomline — $500 billion worth of digital purchases were inspired by social connections in 2020, and still social platforms are yet to figure out how to make $$ commissions using the opportunity, which throws an exciting opportunity at the disposal of regional upstarts like Glance, Meesho.
Meanwhile, Middle East ain’t done with Indian startups ✋
Sovereign wealth fund of Abu Dhabi, ADQ, is looking to invest another $500 million into Flipkart, alongside several others including Softbank and Singapore’s GIC, all lined up to help Flipkart clean up its balance sheet before the eventual IPO early next year. Post deal valuation will be set at $35 billion! What a missed opportunity.
Closing out — Mental Health is where puck is going 🤞
One inadvertent blessing of COVID has been that by the end of it, the entire topic of mental health no longer is a “taboo”. That has moved a ton of VC cash into the ecosystem — in an attempt to counter the “unseen” pandemic gripping white collar workers.
For 2020, western markets saw a total of 124 deals cracked in the space, raising a total of $275 million, 5.5x the average 5 years ago. Record breaking 8 firms are now mental health-unicorns.
Why care — in 2019, 11% of US adults claimed they have anxiety or depression. By the end of 2020, that number has spiked to 49%!! Mental health reporting is scarce in India, but we’d be willing to take a bet the numbers are similar or worse.
Big picture — still largely an unexplored opportunity for Indian startups to make a dent. Regional clones to Calm, Headspace, Talkspace, seem inevitable.
What else are we snackin’ 🍿
🤦 Breaches, breaches, everywhere - 3 million Volkswagen and Audi customers' details were exposed after a close vendor suffered a data breach.
📈 Stonks FTW - unregulated OTC markets are on fire, with unlisted stocks of everything from Old Monk to NSE to PayTM selling faster than the bottles of Old Monk themselves.
Hit that 💚 if you liked today’s issue.
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