- Arvind's Newsletter
- Posts
- Arvind's Newsletter
1.India must use private defence suppliers more, says Larsen & Toubro
India needs to give more business to domestic private companies in defence procurement currently dominated by state-owned companies and imports, according to the chief financial officer of one of the country’s largest engineering and construction companies.
Larsen & Toubro CFO R Shankar Raman said in an interview with the Financial Times that the company’s production abilities exceeded the procurement opportunities offered by the Indian government. The conglomerate, which generates about 5 per cent of its $27 bn annual revenue from defence, recently signed deals worth hundreds of millions of dollars to help construct ships for India’s navy and supply the air force with radar equipment. It also manufactures weapons delivery and air defence systems.
Russia is New Delhi’s largest arms supplier. During the past decade, Prime Minister Narendra Modi’s administration has liberalised defence procurement and increased bidding transparency, allowing more companies to win military contracts. But New Delhi remains reliant on over a dozen state-owned corporations, such as Hindustan Aeronautics and Bharat Electronics, which have struggled to produce a world-class defence industry and that Raman characterised as “not very efficient”.
Analysts expect significantly more corporate participation in the industry. CRISIL Ratings, an Indian arm of S&P Global, expects the revenues of 25 private aerospace and defence companies it covers to grow 20 per cent in the fiscal year through March 2025.
Raman said that if the government stepped up private procurement, in five years defence could represent 10 per cent of L&T’s portfolio, which includes construction, real estate and financial services.
2.Mutual Funds Bring Ola Electric's IPO Price Back To Reality
This is more evident off late in the large issues of new-age loss-making companies where they are unable to push price and valuation despite having a round by existing investors at a high valuation.
The rising heft of the domestic mutual funds is now bringing some sanity to valuations in the initial public offer size above Rs 3,500 crore. And that is because mutual funds have become a prominent liquidity pool to raise capital in India. Bankers are struggling to push high valuation in large IPOs as mutual funds are pushing back on price and valuations.
India's top mutual funds have taken the role of price setters in large IPOs, and the king (issuer) and their men (merchant bankers) are helpless. Large IPOs cannot get through without mutual funds and the domestic investor will not invest without profit on the table.
A recent example of this could be seen in the IPO of Ola Electric Mobility Ltd., where despite the company raising around Rs 1,100 crore in December 2023 at $5.7-billion valuation, it was forced to price nearly 30% lower in the IPO at $4 billion.
Mutual Funds were sitting on cash pile of over Rs 1.2 lakh crore at the end of June. They have witnessed 40 straight months of inflows till June 2024. Equity inflows increased 17% to Rs 40,608.2 crore in June against Rs 34,697 crore in May, according to data released by the Association of Mutual Funds in India.
3.Airtel begins re-farming mid-band spectrum to meet growth in 5G traffic
With the number of 5G customers rising, Bharti Airtel has begun re-farming its mid-band spectrum to meet a major growth in 5G traffic, the telecom operator said on Monday.
Airtel's spectrum holdings across mid-bands — such as 1800, 2100, and 2300 MHz — throughout the country will be repurposed to provide 5G services. The move will allow enhanced browsing speeds in addition to improved indoor coverage.
In last month's spectrum auctions, the 1,800 MHz band saw maximum demand from all telcos, and it was the only band where Jio acquired spectrum.
The 5G subscriber bases of both Airtel and Jio are rising at a fast clip. Airtel had about 72 million 5G subscribers, while rival Jio had 108 million subscribers as of March end. Since then, Jio's subscriber base has expanded to 130 million at June end, while the latest numbers for Airtel are awaited.
4.India's light vehicle market to be the engine driving global decadal growth
India is projected to lead global growth in light vehicle production with a compound annual growth rate (CAGR) of 4.6 per cent from 2023 to 2033, according to estimates by S&P Global Mobility. This marks an increase from the previous decade’s growth rate of 4.1 per cent, which was also the highest among major countries. India’s performance over the next 10 years is expected to outdo its previous record and outperform other key markets.
In contrast, Mainland China is expected to see a CAGR of 1.7 per cent from 2023 to 2033, while the US is expected to see only 0.3 per cent growth. Japan is projected to degrow by 2 per cent, and South Korea is also expected to shrink by 2.6 per cent. In Europe, Germany will continue to grow, albeit at a slower CAGR of 1.1 per cent.
As of 2023, India is the fourth-largest light vehicle producer with 5.4 million vehicles, upstaging Germany (4.3 million) and South Korea (4.2 million). The leading producers are Mainland China (28.8 million), the US (10.3 million), and Japan (8.6 million). In terms of sales, India ranks third, ahead of Japan.
5.9-to-5 Jobs Will be Extinct by 2034: Reid Hoffman
This is not about a 14-hour work day, or working for 70-hours a week. Reid Hoffman, the co-founder and executive chairman of LinkedIn, has made a startling prediction that the traditional 9 to 5 job will vanish by 2034. But unlike other bold claims that people keep making, this is not just another dystopian, or even utopian, proclamation.
“You may not only work at different companies, you might work in different industries,” said Hoffman, adding that people may stop working like employees and begin working in a gig economy.
The ‘Gig Economy Revolution’, Hoffman believes, will be more significant than anticipated. According to his prediction, within the next decade, 50% of the population will become freelancers and earn more while working for “3 or 4 gigs”, than those working in traditional employment.
6.Young US adults are increasingly politically split along gender lines, adding an unexpected wild card to this year’s presidential election.
According to a recent poll by The Wall Street Journal, 50% of 18- to 29 year-old men support former President Donald Trump, up 14% points from 2020.
Meanwhile almost 60% of women in the same age group said they would vote Democrat, a figure that may well rise given the likelihood of Kamala Harris — one of the country’s most visible advocates for women’s rights since the US Supreme Court’s rollback of abortion — becoming the Democratic candidate. “I think we will see a year of extraordinary gender polarization,” the journalist Derek Thompson said recently.
7.Blood Test Breakthrough for Alzheimer’s
A new diagnostic blood test for Alzheimer's disease was found to correctly identify the condition around 90% of the time, outperforming specialists' assessments based on physical and cognitive symptoms. The breakthrough offers a potential tool to accurately diagnose the disease and at earlier stages of development.
The new test—called PrecivityAD2—measures the ratios of both present in a patient’s blood, plugging the result into a proprietary algorithm to predict the risk of developing Alzheimer’s. Doctors hope the simple and cheap test can replace expensive scans and invasive spinal taps currently considered best-in-class for diagnosis.
8.Mick Herron: ‘Most people didn’t know I was writing – I was a secretive kind of writer’
Mick Herron is one of my favourite (new) authors in the crime/spy genre. It is also the only author I discovered by first enjoying the TV Series -Slow Horses on Apple TV. Since then I have read many more books in the series than Seasons of the TV show. Read this interview with Mick Herron in the Guardian and if you enjoy this genre of fiction I would strongly recommend reading him.
