- Arvind's Newsletter
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- Arvind's Newsletter
1.Zurich Insurance company will acquire a 70 per cent stake in Kotak General Insurance Company Limited for ₹5,560 crore in a single tranche
The proposed 70 per cent acquisition would be subject to fulfilment of customary conditions precedent, including the receipt of regulatory approvals from the Reserve Bank of India and the Insurance Regulatory and Development Authority of India. The proposed 70 per cent acquisition would be subject to fulfilment of customary conditions precedent, including the receipt of regulatory approvals from the Reserve Bank of India and the Insurance Regulatory and Development Authority of India.
2.India market-cap to hit $10tn by 2030; sharp run near-term risk: Chris Wood
India will achieve a market capitalisation of nearly $10 trillion by the turn of this decade compared with the current $4.3 trillion – a rise of around 132 per cent during this period, believe analysts at Jefferies led by Christopher Wood, their global head of equity strategy. The biggest risk in the Indian market, he suggests, is simply how well it has done of late.
"The market looks expensive, most particularly from a mid-cap standpoint. The Nifty Midcap 100 Index is now trading at 25.9x one-year forward earnings, compared with 20.2x for the Nifty. Still these valuations should be seen in the context of the acceleration in growth which should be anticipated as a consequence of the developing capex cycle,combined with the continuing commitment to government funded capex," wrote Christopher Wood, global head of equity strategy at Jefferies in his latest note to investors, Greed & Fear.
3.Ola Electric’s IPO plans prove that EVs trump ride-hailing as an investment
It is no coincidence that Ola Electric, Bhavish Aggarwal's startup from 2017 rather than Ola Mobility, the original business of ANI Technologies Pvt Ltd which was set up back in 2010, has filed for an initial public offering. Ola began life as a ride hailing startup that promised to revolutionise the way Indians travelled. Fourteen years later that promise remains only partially fulfilled, its commercial success and consequently its appeal to the markets, in some doubt. According to reports, Ola's ride-hailing business posted a loss of Rs 1,082 crore for FY23 on a revenue base of Rs 1,987 crore. Even its higher share of the market as compared to its multinational rival Uber, is cold comfort since that still hasn't translated into higher yields.
By contrast, electric vehicles (EVs) are the hottest draw in town and Ola Electric is a market leader in electric two wheelers with a market share of 40 percent as of December 2023. India along with China, is one of the largest markets for electric scooters with sales in the country growing 35 percent last year. While private investors have been bullish on the segment for the last few years, Aggarwal is now exploring if the investing public shares their enthusiasm. The signs are propitious. Earlier this month, Tata Motors, the market leader in the electric cars segment, saw its market cap cross that of Maruti Suzuki, a runaway leader in conventional cars, to become the country's most valued automotive company. Wisely then Aggarwal has chosen to take his EV business to the market.
4.India exported USD 6.65 bn oil products derived from Russian oil to sanctioning nations
Over one-third of India's export of oil products to the G7-led coalition countries was derived from Russian crude, a European think-tank said, highlighting how the partners shunned buying Russian crude and imposed price caps but a loose policy on refined product allowed third countries to use Russian oil and legally export products to them.
While there are no restriction or sanctions on buying/using Russian crude oil and exporting fuels such as diesel derived from it, the Group of Seven (G7) rich nations, the European Union and Australia - called the price cap coalition countries - first set a crude price cap of USD 60 per barrel starting December 5, 2022 and later on products like diesel to keep market supplied while limiting Moscow's revenue.
"In the 13 months since the oil price cap took effect (in December 2022), over one third of India's exports of oil products to sanctioning countries was derived from Russian crude (EUR 6.16 billion or USD 6.65 billion)," the Finland-based Centre for Research on Energy and clean Air (CREA) said in a report."A huge proportion of these exports came from the Jamnagar refinery.”
5.India is becoming an increasingly lucrative market and a more important producer for the world’s smartphone giants.
The country is now a bigger market for iPhones — which long struggled for a foothold because of their relatively high price — than any European Union country, according to Morgan Stanley analysts, and is on pace to overtake China by 2027.
Apple has moved more of its iPhone production to India in recent years to diversify away from China, fearful of a worsening business climate in the country as well as persistent tensions between Washington and Beijing, and now Google is following suit: the company is shifting supply chains for its high-end Pixel 8 smartphone to southern India in the coming weeks, Nikkei reported.
6.Chinese and Russian advances in artificial intelligence and on the battlefield in Ukraine respectively are still heavily reliant on Western technology
Beijing’s AI progress — in many ways rapid and well-funded — is dependent “almost entirely on underlying systems from United States,” The New York Times said. Moscow, meanwhile, has managed to evade Western sanctions to maintain a “brisk business in imports” of weapons and components needed for its war in Ukraine, according to Foreign Policy. Relying on an adversary for key supplies during times of conflict is hardly unprecedented: During World War I, Britain and Germany traded militarily important rubber for glass lenses, even as they fought (Ed Conway in The Material World)
7.Taiwanese Semiconductor companies flock to Japan as the world tries to de-couple from China
As the world—spurred by the US—decouples from China, at least nine Taiwanese chipmakers, including the world’s largest, TSMC, are flocking to Japan and resuscitating its once-robust ecosystem. TSMC is weighing its third facility there; with it comes an ecosystem of chip suppliers, materials inspectors, and labs, and thousands of jobs in research and development, design, and custom chipmaking.
8.McKinsey-led think-tank advised China on policy that fed US tensions
A McKinsey-led think-tank advised China to deepen co-operation between business and the military and push foreign companies out of sensitive industries as part of a project for the central government in 2015.
The recommendations in a book by the Urban China Initiative, commissioned by the Chinese government’s central planning agency, were among dozens of policies it proposed to boost the country’s technological prowess, according to a review of the work, which has not previously been reported in western media.
The UCI’s book — with a foreword by one of McKinsey’s most senior partners in China and drawing on work by McKinsey’s in-house research arm — formed part of the Chinese government’s research for its 13th Five-Year Plan covering 2016-20. The Five-Year Plan included the “Made in China 2025” policy that increased tensions between Beijing and Washington.
McKinsey shut down UCI in 2021 and has played down its relationship with the Chinese government since coming under political pressure in the US, where lawmakers have questioned if consulting in China conflicts with the firm’s work for the US Department of Defense.
At a congressional hearing this month, Bob Sternfels, McKinsey’s global managing partner, said: “We do no work, and to the best of my knowledge never have, for the Chinese Communist party or for the central government in China. The vast majority of work that we do in China is for multinational companies. Many of those are US companies and private sector Chinese companies.”
UCI has been described by several people involved as a McKinsey initiative. One said it was initiated and run by McKinsey, rather than Columbia or Tsinghua. UCI’s director of research Gengtian Zhang, described the organisation as “McKinsey (Shanghai) Consulting’s Urban China Initiative” in a biography in the annual report of a company where he is a director. Other former UCI staff members list themselves as having worked for McKinseyon their LinkedIn profiles. The initiative shared an address with the McKinsey office in Beijing.
