Suing for breach 🏛️
Reliance's bid, electrifying fleet, and Tesla's plans.
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Market summary: 📊
India clinches another decent day, with Sensex now comfortably resting over 47K. US stocks, especially growth tech had a pretty terrible day.
US:
S&P 500 - down 0.22%
Nasdaq 100 - up 0.036%
India:
Nifty 50 - up 0.43%
Sensex - up 0.55%
What’s brewing hot ☕
End of year is when everyone in the business world generally calms down a bit, and this year you can feel that a bit hard. Anyway, quick look at some tiny stuff that went down yesterday.
1️⃣ Honda can’t take it no more—India’s auto industry made a resounding comeback from the COVID induced slump, but not all companies have been winners. Honda was forced to shut a plant in Noida, as well as other global locations, and now the company will be discontinuing production of Civic and CR-V models in India as demand flails. Not the first time global car brands have struggled to woo the demanding desi buyer.
2️⃣ Tata gets control of AirAsia—Tata sons will pay up some $38 million to acquire 33% stake that the AirAsia Group holds in the AirAsia India airline entity, as Air Asia struggles to cobble up cash together to keep funding its global airline operations in the pandemic. Tata and the group along with its Malaysian backers had been negotiating for a long time, but looking at the pittance of the price tag ($38 million for 33% stake, seriously?), it appears that the Tatas finally managed to get their way with the deal.
Suing for heartbreaks 🏛️
VMware is suing its ex-executive for “cheating on” the company and moving on to take up the role of a CEO at competitor Nutanix, without giving VMWare management slightest of hints.
Nutanix had a rocket-ship growth trajectory early on (we did a thread on that sometime ago). However, post IPO their mojo quickly faded with public market investors mercilessly hammering the giant for making repeated, harsh business model pivots. Despite attempts to turn the ship around, the pains just wouldn’t end, and the debacle eventually ended in founder/CEO Dheeraj Pandey leaving the driver’s seat in 2020.
Then Nutanix roped in Rajiv Ramaswami from arch-rival VMware to fill the CEO shoes. But Rajiv who had been one of the top guys at VMware was arguably very hands on with VMware’s strategic direction, which VMware is now claiming could give an undue competitive advantage to Nutanix, amounting to breach of contracts and non competes.
Both companies have been vocally critical of each other at every opportunity and this mess is likely gonna get much worse before it gets any better. Last thing Nutanix investors wanted.
Reliance beefs up entertainment portfolio 🗼
Reliance will pay up to acquire 50% stake in diversified media, sports, and entertainment services company IMG’s India operations (called IMG-R), which Reliance and IMG had kicked off originally via a joint venture in 2010. The transaction is valued at some ₹52 crores.
IMG runs a globally diversified conglomerate that represents athletes, holds rights to regional branding of sports franchises, owns several award ceremonies and fashion event portfolios etc. In India, they had shook hands with Reliance to own local franchises—from sponsoring deals for the IPL, to representing players, to holding premier events like the Lake Fashion Week, and the Hero ISL.
Through a range of these operations, the company was turning revenues of over ₹180 crores+, with a profit of ₹16 crores in the past year.
But India’s entertainment game is changing so rapidly, and Reliance is no longer an underdog in the arena, owning enviable digital properties with solid synergies with these businesses. That’s probably what drove RIL to make the move for more ownership, and for control.
In any case, the transaction is now pending regulatory approvals, and we all know how that works out for Mota bhai!
Electrifying last mile delivery 🛵
eBikeGo, an electric scooter subscription rental service, has partnered with Hero Electric to acquire 1,000 ebikes from Hero over the next year with the intention of supplying them to last-mile logistics vendors nationwide.
With EV’s generally being less expensive on a per-mile basis, the last-mile logistics platforms are realizing that they’re leaving a lot of money on the table (or savings they could pass on to gig workers) by being reliant on petrol-powered delivery vehicles only. In addition to that, the benefits around pollution and other things increasingly matter too. Recognizing the looming shift, tons of leading last-mile service providers are voting in favor of electrifying their fleets.
Not to forget, the booming EV infra scene in India coupled with investor enthusiasm to deploy capital into anything “electric” lately, all make the game exciting.
Anyway, for this particular program, out of the 1,000 bikes to be delivered by Hero, 120 have already made their way to the startup’s base. Hero will be financing these bikes for eBikeGo as well.
Closing out — Million doses in 👋
Within barely 2 weeks since the first vaccines were announced, nearly 1M+ US citizens, particularly frontline workers have been vaccinated. Similar stats emerge out of the EU. COVID showed us society’s flaws in governance and disaster management, but it also gave us a reminder of the brave things mankind is capable of.
Hopefully, India takes cues and escalates matters on war footing to get a vaccine candidate approved as soon as possible.
What else are we snackin’ 🍿
🔌 Tesla’s India debut - after dangling a carrot couple times before, Tesla is again hinting at kicking-off operations in India by early 2021. The company will import vehicles, which Musk in the past has said was blocked due to regulatory hurdles around taxation, and then eventually will look at production and manufacturing domestically based on how demand appears.
Hit that 💚 if you liked today’s issue.
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