Zoom to the moon 🚀

Apple slapped, IPO galore, and Bata’s Indian CEO.

Dec 01, 2020

Hi 👋, Tanvi here.

Filter Coffee hits your inbox every morning with notable tech and business news scoops to jump start your day.

Let’s go ahead and get started:

Market summary: 📊

Softer start to the week in India with investors taking their comfortable time to take Sensex over 45K. US markets returned for a lazy day after a long weekend.

US:

S&P 500 - down 0.46%
Nasdaq 100 - up 0.082%

India:

Nifty 50 - down 0.14%
Sensex - down 0.25%

PayTM Money with some IPO honey🔥

If your portfolio hasn’t had a rocky enough year already, PayTM’s got more for ya. The PayTM Money investing platform will allow retail buyers to directly buy into IPOs, as the super-app looks to bridge the gap with Zerodha.

The value proposition is the same run-of-the-mill offering—seamless interface, security and safety, etc. but the company is counting on leveraging UPI infra for payments, and cutting back turnarounds time it takes to place bids, pay, and receive allocation—in all, enhancing the end user experience. Also, the app will provide a tiny research suite as well showing the company's history, downloading prospectus and then broadly tracking new IPOs, and checking the performance of older ones.

Despite heavy competition in the investments game from Zerodha, INDMoney and Groww, PayTM has set itself an audacious target of 8-10% market share among digital natives for year 1.

Takeaway: another app is cool, and UPI is amazing, but this seems like another “me too” feature than anything else. If the investing industry in India needs something built currently, it’s a service around educating and better informing retail investors to make balanced and long term decisions, many of whom are first timers.

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Quick look at the 🍔 IPO

Burger King India, the entity that runs Burger King’s operations locally, is going public on Dec 2, with the company looking to raise nearly ₹810 crores, primarily to fuel further expansion nationwide.

Financials look quite promising, and investors seem excited about the opportunity, but COVID and competitive challenges are major overhangs.

Some highlights:

Last year revenues of ₹835 crores, growing at 50%+ CAGRs for the past 2 years
About ~64% gross margins, pretty decent for restaurants
IPO will be priced at ₹59-60 per share
Funds will be put to fuel expansion in India and restructure corporate operations around new ownership

Business was bright until COVID dented the company’s momentum—with revenues for the first 6 months of this year coming in at a fractional ₹135 crores, against some ₹420 crores during same time last year. However, things are looking hopeful in recovery as consumers get comfortable stepping out—which should allay investor concerns.

The company’s post raise agenda is pretty straightforward—management hopes to use the capital to fuel national expansion to up to 700 restaurants including sub-franchised outlets by the end of 2026, nearly 3x from its 261 locations it has across the country right now.

Currently, the company owns some 5% market share in the quick-service industry in India with Domino’s, McDonalds, KFC dominating the arena, so management has sizable work cut out for itself.

Italy gave Apple a slap on the wrist 🍎

Apple got fined $12 million by the Italian regulator for “aggressive and misleading” commercial practices when selling iPhones in the region. As you know, Apple claims that the iPhones are water resistant, but the Italians claim that they’re lying because it applies only when the quantity of water splashed isn’t too much. And most importantly, Apple’s warranty terms don't highlight that. LOL.

Lately, for regulators in Europe and other smaller nations, it's not so much about the “cause” they can nail big-tech companies for, but more about the statement they want to send to global corporations, and particularly those from the US, that circumventing basic laws will come with a price.

For Apple, the fine probably won’t even show up in decimals on their financial statements, so they’re not worried, but it could give other countries some confidence to keep pursuing similar action against them or other big tech.

Zoom’s blowout beat 📱

Zoom reported its third quarter performance numbers last night, ABSOLUTELY CRUSHING market estimates by all measures! Some highlights of the record quarter:

Revenue of $777 million, up 367% YoY!!
Profits of $192 million - compared to a loss of $1.2 million same time last year!
Annual revenue run-rate of $3B+
Nearly ~434K customers with at least 10 employees, up almost 500% YoY
Next quarter, Zoom expects revenue of $806M-$811M

Same time last year, the company had reported a paltry $167 million in sales, and it's not everyday that you get to see such stupendous growth rates for companies this size, which only underlines how significantly COVID impacted their trajectory.

Going forward, even in a vaccinated world, substantial business activity is never returning back to pre-2020 normalcy, and these tailwinds will continue to breathe tremendous hope into the company’s prospects.

Stock is down 5% though as investors process the details, but with 600%+ gains posted by the company so far this year— hard to find anyone who’s complaining.

And while we’re talking about surprises, 🤙

Bitcoin marches on, clinching all time highs for a brief moment last night. Fans and advocates of the asset class claim that the rally this time is much different, bolstered by a lot more credible capital flowing in, mass awareness, and a relatively robust ecosystem building around the tech.

Also, with global fiscal policies in uncharted territories right now, the allure of the asset class is shining bright on all types of investors. What will be the new high this time?

What else are we snackin’ 🍿

👞 Bata gets an Indian CEO - Sandeep Kataria has become the first Indian to be made Footwear major Bata’s CEO. Kataria is taking over from Alexis Nasard, who is stepping down after almost five years in the role. Kataria has become the first Indian to be elevated to this global role.

Hit that 💚 if you liked today’s issue.

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