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19th April 2022
Good Morning! 

The COVID cases seem to be increasing again in a few states. Our only thought while seeing COVID numbers is not another lockdown please. Lets hope we don't have state lockdowns and restrictions again.
  MARKETS
 

SENSEX

57,166.74

- 2.01%

NIFTY

17,173.70

- 1.73%

US$

76.27

+ 0.11%

GOLD

53,389

+ 0.75%

10-YR

7.15%

- 6.2 bps

OIL

8,231

+ 1.89%

*As of market close

  • Markets: Stocks sold off heavily yesterday, tracking weakness across global markets. It was the fourth straight down day for the Sensex and nifty50 and financials, IT and oil & gas stocks were the worst performers.

Corporate

Amway or The Highway
Pyramid Scheme

The latest target of the Enforcement Directorate is Amway India Enterprises.

This is in connection with a money-laundering scheme being investigated by the ED, and they now seem to think that Amway is actually a pyramid fraud disguised as a multilevel marketing network.

As per the ED, Amway has collected Rs 27.5k crores from its business operations in India from 20023-03 to 2021-22. Of this, Rs 7.6k crores has been paid out as commissions to its distributors and members in India and the US.

ED officials have found that the prices of most Amway products are much higher than other popular alternatives available in the market. They've alleged that new members are not buying the products to actually use them, but because of the temptation of becoming rich, as shown by the upline members, who get commissions based on the sales of these exorbitantly priced products.

Two other related companies, Britt Worldwide India and Network Twenty One are also being investigated. They provide training services and products to Amway.

These companies apparently played a big role in promoting the pyramid scheme by conducting seminars for joining members, pretending to be for selling goods but instead just focusing on enrolment of more and more members in the chain system. The promoters are conducting mega conventions and are flaunting their lavish lifestyle on social media to lure gullible investors.

The ED has now attached assets worth Rs 758 crores belonging to Amway India, and this includes the land and factory building of Amway at Dindigul District in Tamil Nadu, along with plant & machinery, vehicles, bank accounts and fixed deposits.

Well, there goes another well-recognized name that's most probably going to prove to be another fraud. Did any of you ever buy any Amway product though?

M&A

Another Big Merger?
Handshake

One of the largest conglomerates in India, the L&T group is considering the merger of its two publicly traded IT companies.

Mindtree Limited and Larsen & Toubro Infotech Limited are the 2 companies in question, and both are majority-owned by engineering giant Larsen & Toubro.

While they built L&T Infotech from scratch, L&T acquired control of Mindtree back in 2019. They now have a ~61% stake in the company, which has a market cap of over Rs 65k crores. On the other hand, they own 74% of L&T Infotech, which has a market cap of Rs 1 lakh crores.

BloombergQuint reports that the 2 companies have very little overlap in business or customers, and if they do come together, it could give them better pricing power and lower costs.

Digitization and thus the demand for IT services has been strong over the past few years and has only been accelerated by the Covid-19 pandemic. Large IT outsourcing firms are also expanding into areas such as cybersecurity, automation and machine-learning support, above and beyond the lower-margin traditional back-room services.

Coming together at this time, especially when both companies are already controlled by the same parent does seem to make sense, but the proposal isn't final yet. Don't worry though, we'll keep you updated with the latest developments.

Tech

Foes To Friends
Handshake

Just yesterday we covered how Swiggy have invested in Rapido and that even Zomato were looking at investing in them but things didn't work out.
Well, in today's case things did work out and both Swiggy and Zomato have invested in a single company.

Swiggy and Zomato have invested in the restaurant management platform – UrbanPiper.

UrbanPiper basically acts as the source of truth for restaurants. Most of these restaurants obviously sell across food delivery apps, they are very rarely exclusively on Swiggy or Zomato. Every food delivery app offers a separate dashboard for managing orders, inventory and even updating the menu. Now when you are listed on various apps imagine going and changing something through different dashboards. You would literally have to do the same thing across different dashboards.
UrbanPiper collates all this data from different food delivery app and provides restauranteur's all the essential tools to manage and grow their restaurant. They even provide custom insights based on the orders etc.

For bigger restaurant chains UrbanPiper has become quite popular. They are used by the likes of McDonald's, KFC, Pizza Hut, Haldiram, Subway etc.

Because of these chains and other restaurants, UrbanPiper has now grown to process 14 million orders a month.

Post this round of funding UrbanPiper is looking to expand to the Middle East as well as Europe.

We are honestly surprised to see both Swiggy and Zomato get a stake in them but with the sort of product UrbanPiper has it is understandable why they'd want to get in.

On a Lighter Note

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