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5th October 2021
Good Morning! 

Apologies for not being able to reach you yesterday! We were a bit under the weather, but are feeling much better now so let's take a look at all the important stories we missed out on over the past few days.
  MARKETS
 

SENSEX

59,307.40

+ 0.92%

NIFTY

17,678.40

+ 0.83%

US$

74.31

+ 0.25%

GOLD

46,283

- 0.01%

10-YR

6.25%

+ 0.2 bps

OIL

5,802

+ 3.31%

*As of market close

  • Stocks: Stocks bounced back a bit yesterday, after 4 consecutive down days. Strong buying across most sectors, including banking, IT and metal company shares took the headline indexes higher. 
  • Oil Prices: Global oil prices have reached the highest level since 2014, with Brent crude oil trading at $81/barrell after OPEC nations decided not to change their production quota.

IPO

Oyo What's Up? 
OYO

After lots of speculation, we finally have the details of Oyo Rooms’ IPO. The company just filed their DRHP with SEBI. Let’s see what they’ve got:

The IPO

Oyo is looking to raise a total of Rs 8,430 crores via the IPO which will be a mix of a fresh issue of shares as well as an Offer for Sale (OFS).

The fresh issue will be worth Rs 7,000 crores, and this money will go to the company that plans to use it to repay some of its debt and fund its growth plans.

The balance will be used to provide existing shareholders with an exit, including the largest shareholder Softbank which owns ~47% of the company. Interestingly, founder/promoter Ritesh Agarwal who owns a ~33% stake will not be selling any of his shares in the IPO.

The price band or valuation for the stock has not been disclosed yet but news reports suggest it will be around $12 billion or ~Rs 90k crores.
This will mark a 20%+ jump from Oyo’s last private fundraising round where they raised $5 million from Microsoft at a $9.6bn valuation.

But how’s the company been doing?

You may think the pandemic would have had a terrible impact on Oyo, but that isn't stopping Ritesh Agarwal from going ahead with his IPO plans. 

In fact, the filings show that they've managed to shrink losses considerably in the past year - In FY21 Oyo recorded a net loss of Rs 3,943 crores. This seems bad on its own, but compared to the Rs 13k crores they lost in the previous year, this is quite an achievement.

What makes this even more impressive is that losses shrunk even as revenue declines 70% vs FY20.

It will be interesting to see how investors react to this offer, and whether Oyo gets the same kind of love as Zomato.
 

Corporate

Corporate Catch Up
Thumbs down


Sorry but this section is full of negative news today :(

Pandora's Box
You may have already heard about the 'Pandora Papers' leaks - they are a set of documents that have been leaked to the International Consortium of Investigative Journalism (ICIJ).

The documents contain names of rich and famous people across the world that have been making 'offshore' deals to hide their identities. This naturally leads one to believe that they were up to some sort of hanky-panky, and that's why they tried to hide.

The 2.94 terabytes of documents have details on over 100 billionaires and hundreds of current and former politicians. This includes 380 Indians, including Sachin Tendulkar, Anil Ambani, Jackie Shroff and Nirav Modi, among others.

The government has now said that an investigation will be carried out, headed by the chief of the central board of direct taxes (CBDT), with help from the RBI, and the Enforcement Directorate. They're also hoping for international co-operation so they can get to the bottom of all this 'offshore' business.

Let's see what happens. 🤞


SREI Infra Bankruptcy
The RBI has announced that they've superseded the board of directors of  2 companies of Kolkata-based Srei Group.
The central bank will soon begin insolvency proceedings against Srei Infrastructure Finance and Srei Equipment Finance Limited and has appointed a former Bank of Baroda banker as the administrator.

The companies had been facing financial trouble for some time now, and last week lenders (led by UCO Bank) denied them a chance to restructure the Rs 30,000 crores in debt owed.

The group's troubles were exacerbated by the pandemic, and last month even the CEO resigned because they were unable to pay his salary. The matter will move to the NCLT now where they will try and sort things out so that lenders can recover as much as possible. 


Zee v/s Invesco

More boardroom trouble news - the battle between sitting directors (including CEO Punit Goenka) and large investors at Zee Entertainment Limited just took another ugly turn in court.

Invesco Developing Markets Fund (a large shareholder of ZEL ) has asked the NCLT to pass an order that will make an extraordinary general meeting (EGM) of shareholders mandatory for the company to hold.

The legal team representing the investor said that they were not concerned with the outcome of this EGM, but only with the fact that such a meeting should be held.

Zee Entertainment, on October 1 had apparently held a meeting of its board of directors, where they voted that an EGM was not required.

This was not what the 2 large shareholders Invesco and OFI Global wanted, and now they're saying that this board meeting was just held as a formality. They're still insisting on the EGM and want the court to support them.

Tech

Tech Today
Money gun
 

Byju's Raises -- Again

We've been off for the previous 4 days and Byju's could have announced their new round of funding on any of those days. But nope, they waited for us to start writing again.
Byju's announced that they've raised about $300 million as part of a larger round.

The company is now reportedly valued at $18 billion! Talks of them going public are actually becoming quite serious now, and it looks like they may go for an IPO next year at a $50 billion valuation!

As with their other fundraises, this time too Byju's plan is to use the money to expand internationally and acquire companies.
How long do you think we go before the next bit of Byju's news?


Thrasio Entering India

With all the desi versions of Thrasio popping up in India, the actual Thrasio clearly thought it is time for them to launch here as well.

This idea where a company acquires small online-first brands that sell on Amazon has been gaining steam globally since Thrasio started it. And plenty of desi startups have also raised money to try that.

Thrasio itself has set aside $500 million to acquire brands here.

Apparently, they're  already close to making their 1st acquisition here, with news of them being in talks to acquire the home appliances startup Lifelong Online.

ET thinks the deal is going to be worth between $30 million and $50 million.

Lifelong online claims to have sales of Rs 50 cr/month during peak season.

With so many similar companies in India now, we are seriously wondering whether they'll all have enough online-first brands to acquire?

Tech

Tech Recap
Money gun
 

Meesho Raises

Meesho announced that they've raised $570 million and doubled valuation in less than 6 months! The company is now valued at $4.9 billion.

A quick recap on how Meesho works...
Meesho enables people to become resellers of a number of different products.
A reseller can go on Meesho and decide what he/she wants to sell, then decide a markup price to add to it and begin sharing their product catalogues to their network to sell.
Because of how almost all of India's internet users use WhatsApp, the sharing is mostly done through it.
Meesho then takes care of everything from inventory to order fulfilment and returns.

The company has actually had quite the year. Meesho's order volumes jumped 2.5x, and as of April this year they had 13 million entrepreneurs and over 100,000 suppliers using their services. Interestingly, about 80% of resellers on the platform are women.

The company is now expanding into many more categories and the groceries seem to be at the top of their list - A major part of this funding is going to go to expand the grocery vertical.

PS: Come on Meesho, hit the $5 billion valuation mark soon so we can talk more about our Paanchacorn agenda.

Autopay Issues

You all may have got some messages about how recurring card payments will be affected.

The new rule is aimed at empowering cardholders. Payments can only be made after the consent of the card owner and so existing instructions for whatever recurring payments you have might get affected.

This is most likely only going to be the case for recurring payments >Rs 5k.
If you have recurring credit card payments >Rs 5k, you will have to re-authenticate the transaction.
An additional layer of authentication has been added as well, so you will have to enter an OTP every time a payment is made.

On a Lighter Note

Campus Ambassador Program

If you are a college student do take a look at our campus ambassador program. 
Here's the link for details.

If you have more time ...

  • WhatsApp, Instagram and Facebook were all down at the same time yesterday. Someone go and check how much time people spent on Netflix then.
  • Citi Economists think the RBI may hike some interest rates. Here's why
  • The National Asset Reconstruction Company (NARCL) has been granted a licence by the RBI

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