VI's stinky mess 💩
Auto recovery, Big Tech things, and new IPOs.
Hi 👋, Tanvi here.
Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.
Sign up below for free. 👇
Let’s go ahead and get started:
Market summary: 📊
Indian markets keep shedding gains, with portfolios now starting to feel some serious pressure. US had a mixed day with tech taking a break and traditional and travel stocks flying up.
US:
S&P 500 - up 0.52%
Nasdaq - up 0.036%
India:
Nifty 50 - down 0.26%
Sensex - down 0.31%
Weekend shot of espresso? ☕
✅ Manufacturing industry is hurting — Economic freeze weighed down a bit on India’s manufacturing sector — with the Manufacturing PMI, basically an indicator derived based on levels of inventories, new orders, production throughput, etc. tanking below a 3 year average to 48.1 — marking a month-over-month decline for the first time from the bottom of the first wave 11 months ago. Blue collar labor, small merchants, and SMEs should be the worst impacted by the freeze.
✅ Social commerce FTW — Flipkart made an audacious dive into social commerce, and specifically into OG Meesho’s territory with a new product called Shopsy. Users will be able to download the app, surf products, build a portfolio, and then share links with their friends and family, making $$ every time a referral transacts, while Flipkart handles all things fulfillment in the backend. Sleepless nights for competition — disruptors, as well as incumbents.
VI lays a royal turd 🗼
The gap between India’s top 2 telcos and the third contender keeps widening — as VI limps along, saddled by its mammoth debt, sub-par spectrum assets, and operating inefficiency. Latest quarterly earnings offer a grim picture.
Quick look:
Losses of ₹7K crores, a ridiculous 84% higher than what the markets were expecting
Revenues of ₹9.6K crores, a 12% sequential drop — forgivable in the COVID situation
ARPU declined to ₹107 from ₹121 last quarter, 15-20% below competition
Total debt expanded by 60% to ₹1.8 Lakh crore
you can’t possibly compete with that bag on your shoulders, against a much polished balance sheet, and agility of competitors like RIL?
Dalal Street sniffed the junk and beat VI stock into a pulp — down 8.5% by day's end. With unpaid spectrum charges piling up, falling subscribers, declining revenues, and debt costs — management hinted at a desperate need to raise cash to avoid a crash and burn.
What do they say — a couple days ago Sunil Mittal of Airtel said “it’d be tragic” if only two players eventually survive in India’s telco game.
Big picture — leaving a market for just 2 giants to split up between themselves could lead to price increases, service declines, and other anti-trust problems, just as the nation heavily leans on telcos to provide connectivity for our rapid digitization.
Quick round up of little things from Big Tech world 🧐
Quite the lazy week for big tech giants, considering the upcoming July 4th Independence Day long weekend in the west. Here’s a few nuggets:
Amazon has filed a complaint against Lina Khan, the top cop hired by Joe Biden to lead the FTC and pursue regulatory action against monopolistic practices of Big Tech. AMZN demands Lina be recused from ALL cases related to the company — citing her past criticism of the company, and basically claiming she has already made up her mind. Tough sell, but Bezos earned some free -ve points.
Instagram head Adam Mosseri says they’re reshaping the app not just around photos anymore, but more broadly around content to compete with TikTok and YT Shorts. “Let's be honest, there's some really serious competition right now. We're no longer a photo-sharing app or a square photo-sharing app”. That’s honestly the first time $FB has acknowledged any threat to its golden goose.
Lastly, Microsoft found a vulnerability in Netgear routers that allow hackers to sniff into the basic code (firmware) meant to run a router, without an authentication and take complete control of the devices. Netgear stock was hammered, considering how touchy the security subject remains in the aftermath of some major hacks.
Onwards…
Auto party is lit bruh 🚗
June data shows a resounding comeback for India’s automotive industry, which had frozen in its track in May, now breathing some optimism into the markets.
Quick look:
Maruti Suzuki sold 1.47 lakh cars in June, nearly 3x’ing its volumes in June compared to May
Tata Motors saw a similar rebound, bit less enthusiastic, but a respectable 60% bump
Other passenger car sellers looked great too — MG doubled volumes, Mahindra grew by 89%, all hinting at consistent consumer improvement
Meanwhile in the commercial segment as well the party was promising — with Ashok Leyland as well as Mahindra’s farm biz blasting 100%+ growth rates!
Big picture — cars clearing from lots is not just great for the auto stocks, but reads well for downstream financial services, suppliers of parts, service providers, while signaling some consumer strength.
Closing out — IPO pipeline thickens 💪
What Happened —insurance giant Policybazaar is joining the list of 1.0 giants PayTM and Zomato for a Dalal Street listing by the end of the year, looking to raise $500 million, at a $4 billion valuation.
The online insurance comparison portal sells 4M+ policies each month, to an audience of nearly 100M monthly visitors. Revenues doubled last year, growing to ₹515 crore on the back of COVID led rise in demand.
Big picture — successful listings could be great for an emerging insure-tech ecosystem, as seed and mid-stage startups aggressively innovate beyond just marketplaces.
And oh, while we’re on IPOs:
The Uber of China, Didi, knocked it out of the park with its Wall Street IPO — booking $68B in market cap, and stock soaring 10% on the following day. This US listing was the first official fu Chinese tech has offered its own government for recent suppressal of tech giants.
What else are we snacking 🍿
🤡 Charged- Trump’s business, along with his finance chief, were finally indicted in a tax dispute, and for not reporting their true income.
💰 Sold - Internet source code inventor, Tim Berners-Lee, sold his “creative work” for $5.4 million in an art auction.
Hit that 💚 if you liked today’s issue.
You can forward this email or share FC on social media by clicking the button below. Thanks and Ciao! 😀