Vodafone is trying 🗼
PayTM got problems, Inflation pain, and Air India finds a CEO within.
Market summary: 📊
Makes no sense no more. India continued to add strongly to lost ground, now up almost 7% over the past five trading sessions. Meanwhile the shameless flogging in the western market continues, with the S&P down 13% so far this year.
S&P 500 - down 0.74%
Nasdaq - down 1.92%
Nifty 50 - up 1.68%
Sensex - up 1.45%
What’s brewing hot? ☕
📱 There goes your iPhone — the semiconductor industry, battered by COVID’s jolts, may have to wait a bit longer for recovery. After China went all rogue upon finding a few more COVID cases, production plants across major towns have been shut down. Among those, is a Foxconn facility that makes iPhones for Apple. While Tim Cook had previously told investors to hold back hopes in 2022, Apple struggling to meet demand and growth projections could pull major indices even lower. We’ll see how this plays out!
📈 Here we go — India’s inflation data is out. For February, average growth in retail prices (aka CPI inflation) came up at 6.07% — a tiny increase from 6.01% in Jan 2022. While the expansion in the numbers isn’t much, markets were holding out for clear hints of contraction. Food prices mostly held steady, while it was fuel and clothing that somewhat contributed to the increases.
VI and Nazara plan a gaming revival 🎮
What’s poppin’ — Vodafone Idea has partnered with homegrown-gaming giant Nazara Technologies to launch its gaming service called VI Games — in a bid to stop the decline of its subscriber count, and expand revenue streams.
Through the partnership, VI will offer over 1,400 basic-mobile games, both free and paid, to its subscribers across Android as well as web-browsers — across categories like sports, action, education and puzzles. Majority of the games will target casual gamers, while social gaming and e-sports will follow soon. Here’s Moneycontrol.
Worth noting: Since Jan 2020, Vodafone has lost over 67 million subscribers, while ARPU has dropped like a rock. Hopes are, for now atleast, those virtual coins in poker wallets keep people from churning away to Jio.
FWIW, VI’s other rivals, Jio and Airtel, have increasingly leaned on digital services to monetize and engage users more deeply. Vodafone Idea had to do something.
Bottomline — we believe this is a much bigger win for Nazara than it is for VI, who gets to tap into VI’s 200 million+ subscription base, with little heavy lifting.
PayTM sinks deeper into this mess 🤦
Monday morning brought a carnage in PayTM stock after Bloomberg reported that the real reason why RBI stopped PayTM Payments Bank from onboarding any new users was because PayTM was sharing data on Indian users with its Chinese affiliates. TF?
True, or rumors, hardly matters — news like that could do irreparable damage to the brand and hurt PayTM’s odds of fighting an already brutal share war.
FYI, Alibaba and its affiliate Ant Group own as much as a 28% stake in PayTM. PayTM however categorically denies that any such data sharing took place. Company’s official response goes like 👇
“All of PayTM Payments Bank’s data resides within the country. We are true believers of the Digital India initiative, and remain committed to driving financial inclusion in the country.”
Moreover, the CEO was then seen doing rounds on TV, trying to put off the fire before it spins into a stinky public show. Regardless, a thorough IT audit is due and regulators won’t budge until then.
Bottomline: “the news is unlikely to have a major business impact on the firm, but will reduce its chances of “upgrading” to a small finance bank if regulators get angsty.” — says Research firm Macquarie. Consequences will impede the product roadmap, no doubt.
Investors dragged the stock down another 12% last night — now almost 67% below its IPO price.
Quick look at an IT acquisition 🖥️
Mumbai-based Thirdware has been in the business for over 20 years, basically supplying software to OEMs and car makers to run their production operations, supply chain, analytics systems, procurement functions and more.
The company has a client book of over 350 customers. Tech Mahindra will leverage their services expertise to expand deeper into the auto space, as giants of all shapes and sized increasingly digitize ops post COVID.
Worth mentioning — post COVID, IT firms have gone on an acquisition spree to fill up capabilities to suit emerging technologies like Cloud Computing, Security, and more. INFY, Cognizant, TCS, Tech M, and others among themselves have made 30+ acquisitions over the past 2 years.
Closing out — the party is starting to cool off a bit 🙃
Entrackr is reporting that Trell, a social-commerce startup, is laying off almost 40-50% of its workforce after business begins to slow down.
Trell had raised over $45 million in capital about barely 9 months ago, but reports suggest EY is actually auditing the company for financial irregularities. Also, burn rate was apparently topping a million dollars a month, and becoming increasingly hard to manage.
Moreover, as we’ve seen through the earnings season and otherwise, trends put in action by COVID are slowly starting to fade out too, waking up companies to new realities.
Worth noting — this isn’t an isolated event. Few days ago we had Lido Learning, a well funded business shut shop, and several other not so famous stories from hyperlocal delivery to payments continue to fold hands.
Liquidity may not have dried out, but pressure to deliver on metrics has certainly increased. Watch closely!
What else are we Snackin’ 🍿
🦺 Safe zone - the Indian embassy from Ukraine has been shifted to Poland as the war spreads to the western parts of the country.
✈️ Chandrasekaran in control - after Turkish exec Ilker refused the job, Tata has appointed its Chairman, N Chandrasekaran, as Air India’s Chairman too.
Hit that 💚 if you liked today’s issue.
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