Arvind's Newsletter

1.Tata vs Pakistan: The Indian group’s market capitalisation is now greater than Pakistan’s GDP, reported the Economic Times.

Tata Group companies have delivered remarkable returns in the last one year, propelling the conglomerate's market value to a size surpassing that of the entire economy of neighbouring Pakistan, according to a report by The Economic Times.

Currently, India's largest business conglomerate boasts a market capitalisation of $365 billion or approximately ₹30.3 lakh crore, exceeding the International Monetary Fund's (IMF) estimations of Pakistan's GDP, which stands at approximately $341 billion.

Tata Consultancy Services (TCS), valued at around ₹15 lakh crore or $170 billion, stands out as not only India's second-largest company but also nearly half the size of Pakistan's struggling economy, which grapples with a looming economic crisis aggravated by an overwhelming debt burden.

2.Creative marketing in the digital age: How far is too far?

That Poonam Pandey’s “death” was staged is now well known. The ad backfired. The industry isn’t new to such incidents. But they don’t learn from it. Whatever is the matter with them? And why do creative agencies persist with these attempts? The Founding Fuel Media company asked Vivek Sharma, founder of Altivyst Advisors, to explain this. In a sharply crafted essay in Founding Fuel Blog, Sharma did a deep dive into that. (Regular readers of this newsletter probably know that Founding Fuel is one of my favourite blogs).

“Brands hire digital agencies for the job and give targets for x number of posts per week, reach (read eyeballs) and engagement (read attention). Agencies are under constant pressure to deliver on these targets through interesting creatives, memes, and events—or manufacture events like it happened in the Poonam Pandey (death) or Harsha Bhogle (kidnapping) case. Unlike the traditional mediums of TV, print and radio, digital is ‘always on’ and eyeball opportunities have to be captured fast and on the go. Hence the constant need to push creative boundaries and create brand content that gets immediate attention. It is a legitimate task. And this is the nature of the beast of marketing in the digital age.

But, how far should brands push creative boundaries? And what can they do to ensure the narrative doesn’t run away in unwanted directions? The Poonam Pandey-cervical cancer episode is in a series of many others earlier, and raises a few questions for the marketing industry:

1. How far is too far? How do brands decide the subjects they associate with?

2. A brand works with many influencers. How should it choose influencers (if one can call Poonam Pandey that) to associate with, especially for events/occasion marketing?

3. What should be the governance for approving creatives in the digital age?

4. Who is ultimately responsible for failures, especially disasters like this—or success—of digital creative

3.Russians mourn Aleksei Navalny

Aleksei Navalny, the Russian opposition leader, died in a penal colony on Friday. He was 47.

The longtime YouTuber and one-time presidential candidate had amassed 6 million followers for his documentary exposés of corruption in Russia under current President Vladimir Putin. In late 2020, Navalny nearly died after being poisoned with a Soviet-era nerve agent and was flown to Germany for recuperation. He was jailed upon voluntarily returning to Russia in 2021. His death comes a month before elections where Putin is slated to win a fifth presidential term amid limited opposition

 His family, which confirmed his death, has not been able to locate his body. Russian authorities said he suffered from “sudden death syndrome,” which appeared to indicate sudden cardiac arrest. President Biden blamed President Vladimir Putin.Navalny’s health had been deteriorating for years. He was being held in a prison above the Arctic Circle, where he was kept in freezing conditions and given mysterious injections.

Navalny’s allies are trying to regroup. Some are hopeful that his death may galvanise opposition to Putin, and are looking to his wife, who gave a forceful speech to Western leaders after receiving the news of her husband’s death.

At least 400 people have been detained across Russia since Navalny’s death, a rights group reported.

Separately, Russian forces announced the capture of the eastern Ukrainian town of Avdiivka Sunday, Russia's most significant gain since taking the city of Bakhmut in May. 

4.San Francisco is undergoing an artificial intelligence-driven boom, after some tech leaders wrote the city off. 

San Francisco saw scores of investors and executives flee during the pandemic, when stringent lockdown rules crippled service industries and made the tech elite realize they could work from home. But efforts to set up rival tech hubs elsewhere have failed, despite San Francisco’s much-publicized problems with homelessness and drug abuse, and what many tech leaders consider its dysfunctional governance. Instead, firms are flocking back, The Wall Street Journal reported. The Economist concurred: The city “has no serious rival in generative artificial intelligence,” and reports of its death have been greatly overstated.

5.6x rise in demand for women apprentices in manufacturing sector in India: TeamLease

Recruitment and human resources services  TeamLease has seen a five to six-fold increase in the requirement for women apprentices  month-on-month when compared  prior to  July last year, especially in the automotive and electronics manufacturing sectors, which is helping to correct the skew towards men in machine-based assembly line operations.

Talking about the dramatic change, Sumit Kumar, chief strategy officer at TeamLease, says: “Apprentice intake by companies, especially in auto and electronics, has reached optimum levels. Prior to July last year, we had a requirement for 1,000-2,000 women apprentices from companies. Today it is as high as 10,000 to 12,000 a month. As a result, the share of women apprentices in our recruitment, which was only 10-15 per cent earlier, has now become 45 per cent to 50 per cent. What we see is that companies in electronics and auto have become completely gender agnostic in their recruitment for assembly line workers. They are also looking at bringing rural women to the fore ”  

 Earlier, manufacturing companies would look for candidates from Industrial Training Institutes for assembly line operations, but there were few women among them. Kumar says that now companies are recruiting women who have passed out of school or have done a one-year diploma course and then training them on the job.   

While the trend of recruiting women for the shop floor is most visible in electronics and auto industries, it is also spreading to pharmaceuticals, food processing and medical devices.

6.The new realism in venture capital is healthy, opines Holden Spaht in Financial Times.

The stampede of new Silicon Valley unicorns emerging into the world has thinned into a straggling herd.

Venture capital firm Cowboy Ventures recently reported that of 532 US start-ups with billion-dollar-plus valuations in 2023, 60 per cent were what it dubbed “Zirpicorns” — companies last priced between January 2020 and March 2022 when zero-interest rate policies propped up valuations.

Times have changed. Higher interest rates are just one aspect of a more broadly challenging business and market environment that makes private equity firms even more selective about the companies they target for their portfolios.

Finding a pathway to operational excellence and profitability for portfolio companies is the hard work that private equity managers live for. But PE can’t acquire a company that won’t sell at a plausible price. And it has naturally taken time for start-up owners to come to grips with valuations that are more realistic in a normal interest rate and business environment.

That’s contributed to a stockpile of so-called “dry powder” — funds committed by investors but sitting idle — that has risen to nearly $4tn, according to estimates from BlackRock and Preqin. It’s obvious that money not put to use doesn’t earn returns. And with exits from older investments still constrained by the drought in initial public offerings, stories are being told about how private equity faces a dilemma of nearly irreconcilable imbalances: too many older acquisitions under management; investors asking for return of capital to meet their liabilities; PE firms trying to raise money for new funds. 

That does sound like an awkward equation. For the optimists, it is just a matter of buying a little time until a “new normal” crystallises. But that would require substantial monetary policy easing, market stabilisation without a recession, a reopening of the IPO window; a burst of (delayed) exits to the public markets.

Read on

7.‘Oppenheimer’ Sweeps the BAFTAs With 7 Awards Including Best Film

“The Holdovers” and “Poor Things” were also honoured at the British equivalent of the Oscars, while “Saltburn” and “Barbie” left empty-handed.

“Oppenheimer” swept the BAFTAs on Sunday night, winning awards for director Christopher Nolan and actor Cillian Murphy as well as taking home the prize for best film.

Overall, the movie took home seven golden BAFTA masks, with “Poor Things” coming in second place with five wins.