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21st September 2021
Good Morning! 

There was some more good news on the COVID front yesterday - the number of active cases is the lowest it's been in 183 days!!
We can't believe we've already spent a year and a half with this. 
Let's hope the downward trend in infections continues so we can watch the IPL final with our friends like pre-COVID times. Who do you think is winning it this time?
  MARKETS
 

SENSEX

58,490.93

- 0.89%

NIFTY

17,396.90

- 1.07%

US$

73.74

+ 0.35%

GOLD

46,285

+ 0.65%

10-YR

6.14%

- 3.0 bps

OIL

5,203

- 1.57%

*As of market close

  • Markets: Global equity markets saw sharp sell-offs yesterday, and our markets were no different. Banking, metals, and realty stocks were the worst performers. Investors are continuing to keep a close eye on developments in China as Evergrande teeters on the brink of collapse.

Bankruptcy

Start It Again!
Unbeleivable

Do you guys remember a couple of months back we'd done a story on Videocon Industries being acquired by the Vedanta Group because it had gone bankrupt?

Well, it's no problem if you don't, because that has been scrapped and the whole NCLT process will start all over again for Videocon.

Wait, what?
Yes, you read correctly. The committee of creditors (CoC) has asked the NCLT for permission to invite a fresh round of bids for Videocon Industries.

The CoC represents all lenders to a company that is going through bankruptcy proceedings. Whoever is owed money by the defaulting company sends a representative to the CoC and they all vote and decide on the best way to resolve the case.

In June, a Vedanta group company called TwinStar Technologies was declared the winning bidder by the CoC.

This actually surprised a lot of people for 2 reasons:

  1. The bid amount was very low. Very very low - TwinStar had offered to pay Rs 2,900 crores vs Rs 60k crores owed to the bank by Videocon. And of this, only Rs 200 crores was being paid in upfront cash.  That was a <5% recovery rate for lenders.
     
  2. Then, the NCLT pointed out that a 3rd party valuer had determined a liquidation value of Rs 2,568 crores for Videocon (this is kept confidential until all bids are received). TwinStar's bid was Rs 2,962 crores, which certain people at the NCLT said felt too close to the confidential liquidation value.
Despite this, 95+% of members of the CoC approved the bid, and so TwinStar was announced as the winner.

But Bank of Maharashtra and IFCI Limited were 2 members of the CoC that did not agree. They moved the NCLAT and got a stay order against TwinStar's proposed acquisition.

Now the remaining members of the CoC seem to have realized that the amount may be too low, and they've asked the court for permission to invite more bids - basically go through the whole process again!

We're not sure what it is but something smells fishy over here for sure.

Corporate

Corporate Catch Up
Office meeting

DHFL
In more insolvency-NCLT news, the DHFL case is finally coming to a close. And by this, we mean a proper close, not like what you just read about for Videocon.

BloombergQuint reports that people are finally getting paid as SBI has signed some key papers which will complete the transfer of shares of the company to acquirer Piramal Group.

The Piramal Group had originally won the bid for DHFL in January this year. Then in June, the NCLT gave its approval for the plan as well. As per the official timeline, the transaction should have closed in the first week of September. But we guess 'itna toh chalta hai'.


Shapoorji Pallonji 
Just yesterday the SP group was in the news after they announced the sale of 75% of their stake in Eureka Forbes.

Now, as per BusinessLine, they are getting ready to raise Rs 8,000 crores by pledging their shares in Tata Sons Limited.

They've apparently got a deal in place with Singapore-based Farallon Capital, and it should be finalized over the next few weeks.

The SP group has an 18.37% stake in Tata Sons, and as we discussed yesterday as well, have a lot of debt to repay. Cash flow from their businesses hasn't been great, so they sold Eureka Forbes, and are also trying to sell other units including Sterling & Wilson Solar and Afcons Infrastructure.

In 2020, they had tried to raised Rs3,750 crores by pledging shares in Tata Sons, but that move was blocked by Tata, who managed to get a stay order from the Supreme Court.

Experts cited by Business Line say there might still be some legal issues with it. Whatever the case might be, you can count on us to keep you updated with the latest.

Tech

Tech Snippets
Making Moves
 

Amazon had quite the day yesterday.
First, a story broke out about how they had to launch an internal investigation after a whistleblower complained of their legal reps bribing Indian govt officials. 

The company is investigating whether the 'legal fees' they paid was used to bribe govt people. Nothing is confirmed so far, but the timing of this makes it really interesting. Amazon is undergoing an antitrust investigation here in India and also has new e-commerce rules to comply with.

On the positive side, Amazon India also announced a plan to roll out a voice shopping experience feature in Hindi right before Diwali. This will only be on Android phones to start with. 

Rival Flipkart already has been working on voice search in different local Indian languages. Considering only 10% of our population speaks English, you can understand the focus on local languages.

Cars24 Cars24

We haven't been able to get Cars24 ad's song out of our head.
Last year in November they joined the club... you know the one.. the unicorn club.

This time they've raised $450 million from Softbank and some other investors. Their valuation has now almost doubled to $1.84 billion.

Instead of just matching dealers with car sellers, Cars24 actually buys used cars and then sells them to dealers. This is is exactly why they say they can help you sell your used car in 30 minutes on the very first visit. The one drawback is that this makes their business model quite asset-heavy.

But with valuation almost doubling, it seems they've been doing well over the past 10 months or so.

Expansion plans
Cars24 doesn't want to just stop at cars. They've recently launched their used 2-wheeler category--Cars 24 Moto. They are also going to be launching their very own NBFC super soon and hope to give auto loans in 2 hours! 

The market for used cars and bikes in India is a huge $50 billion opportunity. Even COVID hasn't been that much of a downer here for the sector. In fact, Cars24 sales volumes are higher than the times of B.C(before corona). They have just a 4% market share at the moment, so clearly, a lot more opportunity ahead. 

On a Lighter Note

If you have more time ...

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