Copy
20th September 2021
Good Morning! 

Happy Monday!!
We ended up giving 2.5 crore(25 million) vaccine doses on Friday!! 
We are super proud of this effort. To put things into perspective we gave out doses to the entire Australian population in 1 day.
Let's hope we can keep vaccinating at a decent rate so we can cover the entire adult population.
  MARKETS
 

SENSEX

59,015.89

- 0.21%

NIFTY

17585.15

- 0.25%

US$

73.48

- 0.04%

GOLD

46,000

- 0.16%

10-YR

6.17%

- 0.1 bps

OIL

5,291

- 1.12%

*As of market close

  • Markets: Stocks opened higher on Friday morning but eventually lost all gains and closed in the red. This snapped a 3-day winning streak as metal and PSU bank stocks sold off the most. Investors will likely be keeping an eye on Chinese markets today - scroll down to our Foreign Tour section for more on that.

M&A

Eureka!


Like that plan

The private equity firm Advent International is going to buy a controlling stake in home appliance maker Eureka Forbes for ~Rs4,400 crores.

You all probably know about Eureka Forbes because of their famous water purifiers from their brand Aquaguard.
But they actually make a whole host of home appliances.

Eureka Forbes is owned by the Shapoorji Pallonji group. You know the group that belongs to Cyrus Mistry's family.
Shahpoorji Pallonji has been having some troubles making loan payments and had to restructure the deal for the Rs 25,000 crores they owed back in April 2021.
So this deal will help the conglomerate repay some of the debt they're carrying.

Not My First

This isn't Advent International's first Indian deal. They've built a solid portfolio of consumer brands in India since they started investing here 14 years back. They've invested over $2 billion in Indian companies in that time.
Advent owns controlling stakes in DFM Foods, men’s innerwear brand Dixcy Textiles as well as Crompton Greaves Consumer Electricals.

How the deal will go down?

Things are a bit complicated. Currently, Eureka Forbes is a subsidiary of Forbes & Company. 
Forbes & company is already listed on stock exchanges in India.
So now first Eureka Forbes Limited will be listed separately on the stock exchange and Advent will acquire 75% of its outstanding shares for Rs 4,400 crores.

M&A

Deal #2
Woman holding large injection

Serum Insititute of India (SII) has agreed to a deal with Biocon Biologics (BB) where they will buy a 15% stake in the company.

As you probably know, SII is the world's largest vaccine manufacturer and they are producing the Covishield shots that we have here in India. 

Biocon Biologics is a subsidiary of Kiran Majumdar-Shaw's Biocon Limited and makes biosimilar drugs.

Biosimilars are almost identical copies of an original product that is manufactured by a different company. They are officially approved versions of original "innovator" drugs and can be manufactured when the original product's patent expires. (read more)

The Deal

The deal will give BB access to 100 million doses of vaccines annually for 15 years, including COVID-19 shots.

As part of the deal, BB and SII will together make and distribute vaccines and antibody treatments.
BB will also invest in setting up a research division for vaccines, and SII CEO Adar Poonawalla will get a seat on the board of BB.

SII is paying $743 million for a 15% stake, which gives BB a post-money valuation of $4.9 billion.
A few months ago Abu Dhabi based ADQ had invested ~$75 million for a minority stake in BB at a $4.2 billion valuation.

Tax

You are Responsible
responsibility

Zomato, Swiggy and other food delivery apps will have to collect and deposit 5% GST with the government, starting next year.

What's Happening Here?

We are guessing the first question on your mind is am I going to have to pay more for all those food deliveries.
Thankfully the answer is no.

The GST council has just transferred the responsibility from the restaurants to Zomato/Swiggy.
If you notice the break up of your order, there is a taxes component.
Zomato/Swiggy already collect the 5 per cent GST that they need to on food. But they just pass this on to the restaurants.
The restaurants are then responsible for depositing the GST.

It looks like not all restaurants were abiding by this, but the govt got to get paid, so they thought this is the best way to bring all these restaurants not paying into the GST net.

Now when Zomato/Swiggy collect the tax they themselves will have to deposit it. Because of this ruling, all restaurants will also have to mandatorily register themselves.
Compliance will also really increase on both Zomato/Swiggy's side considering they will have to deposit the money.

We are happy that things aren't changing for us, we just hope there aren't any indirect effects from this on us.

Foreign Tour ✈️

A HUGE Problem 

Chinese real estate giant Evergrande is on the verge of collapse, and it has got investors worried.

Evergrande has the most debt of any non-financial company in the world (over $300 billion) and it is struggling to repay. If they collapse, the sheer size of it would be bad for markets in China and even abroad.

They have already warned investors of deteriorating cash flow twice, most recently last week, when they said sales were slowing and were likely to continue to drop.

Some banks, including HSBC and Standard Chartered, have declined to give them new loans for some ongoing projects and rating agencies have downgraded group debt multiple times.

The reason for this super-high debt load is that they tried to expand too much too quickly. Evergrande has a presence in industries like electric vehicles, health care, consumer products, video and television production units and even a theme park.

Read more
On a Lighter Note

If you have more time ...

Share The Gyst

Thanks for being a subscriber. If you like what you read please let your friends know too. You can do that either through Whatsapp or Twitter. Otherwise, you can always share this link with your friends. Have a great day! 
 

You are receiving this email because you have subscribed via our website

Our mailing address is:

The Gyst
Defence Colony
New Delhi 110024
India

If you have any feedback or problems please write to us:
team@the-gyst.com

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.