Tata’s homecoming

Also in today’s edition: Sebi on Ambanis’ tails; Ola Dash's q-commerce dream foiled; Amazon courts online retailers; It’s a good day to be Elon

April 22, 2022 • Estimated Reading Time: 14 minutes

Good morning! Information from locker rooms of professional sport is valuable commodity, even in the web3 era. Ahead of their Dutch Cup final against arch-rival PSV Eindhoven, Ajax footballers Daley Blind and Davy Klassen revealed who would start in goal for their side, The Athletic reported. The duo accidentally purchased a virtual digital player card of teammate Maarten Stekelenburg on Sorare, the Softbank-backed blockchain-based fantasy football platform. No financial penalties, but a costly own goal because Ajax lost the game too.

🎧Today, we have a special episode of The Signal Daily, featuring journalist and author Rohini Mohan. Rohini breaks down the current crisis in Sri Lanka, drawing from her recent reporting trips (last week!) and her deep understanding of the island nation’s economy and policy. You *really* don’t want to miss this!

The Market Signal*

Stocks: Riding on investor appetite in big movers such as Reliance Industries, Maruti Suzuki, M&M, and TCS, Indian benchmarks continued their recovery for the second day. US stocks climbed on Thursday morning ahead of Fed Chair Jerome Powell's talk on the global economy at an IMF event. 

Asia: At 7:30 am India time, the Nifty was down 0.18% in Singapore. The Nikkei 225 was getting a battering and had slipped nearly 2%. The Hang Seng index was down 1.36%.

REGULATION

Ambanis Can’t Shake Off Sebi

Reliance Industries has moved the Supreme Court seeking documents relating to a two-decade-old complaint pending against it in Sebi. 

The ask: The company wants to see a Sebi internal brief to seek legal opinion from justice BN Srikrishna. A revised opinion of Srikrishna and a report prepared by auditor YH Malegam. 

The issue: The documents pertain to a complaint about a transaction from 1994 alleging that RIL and the Ambanis committed fraud. The complaint by then RIL baiter and now RBI board member S Gurumurthy alleged that in 1994, RIL privately sold shares to UTI mutual fund at more than six times the price it sold to the Ambanis. 

Six chairmen have come and gone at Sebi but the case is yet to be concluded. A couple of years ago, a court had dismissed it saying Sebi had delayed it too much. But Sebi wants to revive it.

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QUICK-COMMERCE

Reeling Under Post-Pandemic Agony

You'd be forgiven for not noticing Ola’s latest attempt at grocery delivery. Four months after it took yet another stab at it via Ola Dash, Ola is restructuring the business. It hitched the 10-minute delivery hype ride, and as winter sets in on the space, a rethink is underway.

Why? The company has already fired over 2,000 workers and scaled down the operation of its dark stores to shore up the struggling business in a hyper-competitive sector. Especially at a time when the company is going through a fund crunch, cutting costs is a way to survive.

Global patterns: Globally, companies are nursing a post-pandemic delivery hangover of sorts. Dutch company Just Eat Takeaway wants to sell Grubhub after months of investor pressure as it swung to a loss post-pandemic, owing to declining demand. DoorDash, Deliveroo, and Delivery Hero have also seen their shares decline as more diners started stepping out. Didi Global is also shutting down its food delivery business in Japan.

CONGLOMERATES

Tatas To Cut Down On Away Games

The Tatas are coming back home. After years of overseas expansion, the N Chandrasekaran-led Tata Group will exit subscale businesses and reroute investments to India. 

Not long ago: That is a U-turn from just over five years ago when the then Cyrus Mistry-led group was hungry for global opportunities. Over 70% of its $103 billion revenues in 2016 were generated abroad. 

The group operates 71 companies abroad, including 19 in Europe and 13 in North America. It also owns marquee brands such as Jaguar-Land Rover and Corus Steel.

Have company: Tata Group is not the first Indian conglomerate to shift focus. The Aditya Birla group said last year that it would concentrate on its homeground. 

The Signal

What gives? Globalisation is in retreat, and onshoring is back as supply chains are a wreck. The Tatas have just consolidated their share in the domestic airline industry with the purchase of Air India and would need investment, starting with Esops for employees. Its e-commerce ambitions through superapp Neu, which already is in the crosshairs for its data gathering practices, needs huge amounts of capital. With interest rates rising steeply, it's not easy or cheap to raise capital. Several Tata companies are debt laden and the group almost entirely depends on TCS for cash. It has been selling shares to pare debt. But here’s a reality check: Tata Group revenues last year were $103 billion, unmoved from 2016.  

E-COMMERCE

Amazon AWSifies Delivery

Amazon has found a new revenue stream in monetising its Prime services. Called Buy with Prime, third-party retailers, and online merchants can count on its robust shipping and logistics network to deliver their wares. If it becomes a reality, it will compete with delivery services FedEx and UPS, and rival Shopify. 

The deets: The deal is simple: the tech giant wants online retailers to dispatch their products using its warehouse and delivery services. Amazon Prime subscribers could potentially use this feature to check out and employ its fast-shipping services on other websites.

Rival play: The timing isn’t by accident. It comes on the back of Shopify bolstering its fulfillment services. Shopify prides itself on enabling merchants to sell their products through the platform’s sales channels. Now, Amazon wants to loosen up and cater to these retailers.

Meanwhile, the retailer has acquired women-focused reseller, Glowroad.

MUSKVERSE

The Future Is Deeply Boring With Tesla Robotaxis

Even as Elon Musk claims to have secured $46.5 billion for his Twitter takeover, his tunnelling startup The Boring Company raised $675 million at a valuation of $5.7 billion in a round led by Sequoia and Vy Capital. The infusion will be used to recruit people and scale underground transportation networks to “solve traffic”.

Top gear: Whether the billionaire can solve both traffic and emissions is another matter. While Tesla reported blockbuster earnings and outlook—Q1 2022 revenues of almost $19 billion and production of over 300,000 units, which could increase by 60% by year-end—Musk conceded that his company is grappling with rising input costs.

So? This means Teslas will remain a luxury due to the sucker punches of inflation and supply chain woes. Since affordable EVs for all remains a pipe dream, Musk is betting on driverless robotaxis to compete with subway and bus rides. A wannabe Democratic senator isn’t gung-ho about driverless Teslas, though.

FYI

Goliath moves: Binance, the world’s largest crypto exchange, is leaving crypto lobbying arm Blockchain Association. Rival Coinbase beta launched its NFT marketplace in a bid to challenge OpenSea. Coinbase is also looking to acquire Turkish crypto exchange BtcTurk for ~$3.2 billion.

Stop press: Meta Platforms Chief Operating Officer Sheryl Sandberg is in the dock for coercing UK tabloid Daily Mail to put off a potential article against her then-boyfriend Activision Blizzard, CEO Bobby Kotick.

Talibanned: Afghanistan’s ruling Taliban regime has banned short-video app TikTok for “misleading the younger generation.” The regime has also banned the popular game PUBG.

Cementing a deal: JSW has begun talks with US-based private equity giant Carlyle Group to help acquire the world’s largest cement maker Holcim Group’s India operations.

Unmoved: VCs and angels will have to live with it. Sebi will not change tighter norms for anchor investors in IPOs.

Lights out: Parts of India are facing up to eight-hour power cuts amid rising temperatures as a coal shortage hits generation.

New rules: The EU is rolling out new regulations through a new Digital Services Act, imposing unprecedented curbs on online content to regulate tech companies.

FWIW

Hot girl summer: Megan Thee Stallion can be a handful. Chinese censors realised that recently when WeChat users tuned in to witness Megan's performance illegally. The rapper took to the Coachella stage to do what she does best: groove through her performance. The censors did a bad job of it. Here's proof.

One king to rule them all: Soon, the USB-C type could become the universal charger. The European Union wants to make chargers common for mobile phones, tablets, and headphones in a bid to reduce e-waste. If approved, manufacturers will have to give in to create a universal charging solution. Apple isn't liking it.

The heat is on: The effects of the Ukraine-Russian war will be felt in Italy. The government has set a limit of 25ºC in all public buildings to scrape through the energy crisis. Italian officials have been looking for energy suppliers beyond Russia after the European Union put an embargo on Russian gas.

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