Arvind's Newsletter

1.VCs chase a pot of gold as India's growing affluent class goes premium

Venture capital investors are increasingly backing consumer brands offering premium products, anticipating significant growth in this segment.

Over the last few months, several direct-to-consumer firms such as luggage maker Mokobara, organic dairy startup Akshayakalpa, and apparel brand Bombay Shirt Company, have raised early-stage capital from some of the country’s largest venture capital firms, underscoring the segment’s ability to tap into India’s rising consumerism.

“Until five years ago, our view was that the market at the premium end is small and hence we chose to invest in companies that cater to the mass market," Abhishek Mohan, principal at Peak XV Partners, told Mint. 

2.FMCG demand most in five southern states: Discretionary or essential, sales go north in south

The south appears to be at the vanguard of a broader demand recovery in post-Covid India, with the five states that lead in several socio-economic metrics registering healthier sales of both discretionary and fast-moving consumer goods (FMCG) in comparison with the rest of the country.

Global consumer research firm Kantar's latest report showed consumers in the south spent the highest on FMCG products, with an additional ₹2,261 spent per person on an average in 2023, compared with 2022. It also said the total number of shopping trips nearly doubled in 2023 from the previous year, with an exponential 185% growth in FMCG pack purchases.The data is for Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana.

3.Market assumes easy re-election for incumbent govt, says Pratik Gupta of Kotak Institutional Equities

The recent spike in volatility, often observed preceding big events, is compounded by quarterly earnings and a renewed focus on China, according to PRATIK GUPTA, chief executive officer and co-head of Kotak Institutional Equities. In an email exchange with Business Standards, Gupta highlights that Indian markets are currently displaying signs of being relatively expensive, cautioning investors, particularly in the smallcap space.

Volatility has spiked recently. This phenomenon often precedes big events, such as India’s election results on June 4. Additionally, we’re witnessing sharp stock-specific reactions to companies’ January-March quarterly results.

For foreign portfolio investors (FPIs), it’s the shifting expectations surrounding the timing of interest rate cuts by the US Federal Reserve, coupled with renewed interest in China, and India’s relatively high valuations, that are prompting foreign outflows and contributing to heightened volatility.

While the India Vix has fired up.Elections are inherently unpredictable, and even seasoned exit poll experts can err in their predictions.Presently, the market appears to be operating under the assumption of the incumbent government’s easy re-election; thus, any alteration in this expectation could potentially pose a negative surprise.

However, we emphasise the importance of not basing investment decisions solely on electoral outcomes. Instead, focusing on investing in high-quality businesses capable of prospering regardless of the political landscape is paramount.

4.Iran’s President Ebrahim Raisi died in a helicopter accident, sparking questions over long-term succession in the Islamic Republic and further raising tensions in a tinderbox region. 

A helicopter carrying Iranian President Ebrahim Raisi and other officials crashed yesterdaY in dense fog, leaving no survivors, according to state media. Vice President Mohammad Mokhber is poised to assume the presidency, pending approval from Iran’s Supreme Leader Ayatollah Ali Khamenei (See leadership structure in BBC article below). The country has 50 days to organize new elections.

Raisi—known to critics as the “butcher of Tehran”—was one of four judges who oversaw the execution of thousands of political prisoners in 1988, following the Iran-Iraq War. After leading the judiciary, Raisi became president in 2021, known for cracking down on protesters, enforcing strict dress rules for women, and a confrontational approach to the West and Israel. A protégé of Khamenei’s, Raisi was considered a top candidate to eventually succeed the 85-year-old leader.

Raisi was in a convoy of three helicopters returning from a visit to Azerbaijan to inaugurate a joint dam project when his helicopter crashed over the mountainous region of northern Iran. Also onboard was Foreign Minister Hossein Amir-Abdollahian and a provincial governor, among other officials.

5.What an Expert on Aging Would Tell His Younger Self About Growing Old

John Rowe has been studying aging for 50 years now at Columbia University. These are his views on successful ageing:

Number one is the overwhelming importance of being socially connected and engaged. Study after study indicates that this is critically important. Isolation is toxic for older people. You have to maintain engagement in your community and interact with other people. So, sitting in a room writing an epic poem doesn't count, as intellectually engaging as it may be. You really have to connect.

You can achieve this either by staying in the labor force or volunteering. Both have been shown to be remarkably effective, and there are terrific benefits to cognition, physical health, and psychological health.

If you must retire as most of us do, be sure to stay engaged through volunteerism. Research has shown that there are significant advantages both for the volunteer and, of course, for the people they help.

Number two is the importance of moderate amounts of physical activity. I stress “moderate.” It's fine to be a runner, but if you don't like it, you shouldn't do it. Really, all you need is brisk walking, 30 minutes a day, five days a week, which will give you most of the same benefit as running miles and miles. The benefit of very aggressive exercise regiments is not clear to me, because there are injuries associated with strenuous exercise.

Someone who is aging successfully meets three criteria. First, they have avoided serious chronic disease and disability. Second, they have maintained their cognitive and physical function. Third, they are engaged in life, in society, and in other people. From my point of view, the person who can meet these criteria is aging successfully.  

6.Blue Tokai, Black Baza, Third Wave—Indian entrepreneurs making coffee premium like wine, whiskey

The artisanal and specialty coffee phenomenon isn’t limited to Delhi, Mumbai, and Bengaluru. It has percolated to Nagpur, Varanasi, and Indore, as well as other Tier-1 and Tier-2 cities.

7.The World’s 50 Largest Private Equity Firm

The World’s 50 Largest Private Equity Firms

In 2023, private equity firms controlled $8.2 trillion in assets globally according to McKinsey & Company, a figure that has rapidly expanded since the industry first emerged 40 years ago.

As large investors such as pension funds and insurance companies increasingly look to private markets, these alternative asset managers have seen their assets grow by more than twofold in the last five years.