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23rd December 2021
Good Morning! 

The BCCI has announced that the IPL Mega Auction for next season will be held on February 7th and 8th in Bengaluru.
There were rumours of this moving to the UAE as well because of Omicron concerns, but that doesn't seem to be the case for now.

The auction could be interesting to see this year, because there are 2 new teams joining the IPL - Lucknow and Ahmedabad. And there are also some news reports suggesting that this could be the last ever mega auction, because team owners are unhappy as they end up losing key players. 
  MARKETS
 

SENSEX

56,930.56

+ 1.09%

NIFTY

16,955.45

+ 1.10%

US$

735.55

- 0.07%

GOLD

48,169

+ 0.21%

10-YR

6.47%

- 0.5bps

OIL

5,476

+ 1.01%

*As of market close

  • Markets: Global markets seem to be very well coordinated these days. Our own Sensex and Nifty50 were up for the 2nd straight day yesterday, tracking strength across global markets despite increasing cases of the Omicron variant. Financial, auto, metal stocks did very well and mid and small-cap names outperformed.

Corporate

A Long Cloud-Tale

You are so smart

Amazon India has approached the CCI to try and acquire Catamaran Ventures' stake in Prione.

What's Happening Here?
While shopping on Amazon, one of the sellers that keeps popping up is Cloudtail.

And considering the number of times it is the seller fulfilling the order, we are sure you wondered what this Cloudtail is?

Well, back in 2014, to bypass some sarkari issues Amazon India started a joint venture with Narayan Murthy's (Infosys Founder) Catamaran Ventures. This joint venture was called Prione Business Services.
And Prione's wholly-owned subsidiary is Cloudtail India, which is the seller you keep seeing when you buy from Amazon.

What are these sarkari issues?
Amazon and other e-commerce firms weren't technically allowed to hold inventory or sell items directly to consumers on their own platforms.
But the lawyers at Amazon found a loophole that allowed them to sell on their own platform if they set up a JV with a local company that acted as the inventory-holding firm. (Amazon also has another popular JV like this with the Patni Group -- Appario Retail).

When things started of back in 2014 Amazon held a 49% stake in Prione Business services with the rest belonging to Catmaran Ventures. But then the cat and mouse game started with the government.

Cat And Mouse Game
To comply with local laws back in 2018 Amazon had to reduce its stake down to 24%.
As you regular readers will know this year our govt has been inspired by Dua Lipa and her song New Rules.
They've been coming out with a whole host of rules and they came out with some more in June.
And one of these particularly applied to the whole Cloudtail situation.

E-commerce firms have been asked to ensure none of their related or associated parties is listed on their platform as sellers.

There were also talks of Flipkart and Amazon facing antitrust investigations. Funnily enough, Amazon and Catamaran announced the end of their JV in 2022 just hours after the Supreme court said that Flipkart and Amazon will face antitrust investigations.

Kahani Main Twist
At the time we thought well that's the end of Cloudtail because of the new rules.
But now Amazon has surprised everyone by announcing how they want to acquire Catmaran's 76% stake.
They've even gone on to ask for CCI permission. Honestly, what they want to do next is hard to comprehend atm. Maybe their lawyers have found another loophole and are looking to exploit that.🤷‍♂️

M&A

All Clear!
We're clear

The board of directors of Zee Entertainment Limited (ZEL) has cleared the way for the company's merger with Sony Pictures Networks India (SPNI), in what will be one of India's largest deals in the media sector.

The combined entity will have estimated revenue of Rs 14,000 crores, making it India's 2nd largest media firm. (Can you guess the first?)

SPNI is the Indian media arm of the Japanese giant Sony Corp, which has a market cap of ~$82 billion (Rs 6 lakh crores).
And ZEL, as you may know. was founded by India's own media tycoon Subhash Chandra, and has a market cap of Rs 34k crores (~$5 billion)

After the merger, Sony will hold almost 51% stake in the combined entity, while the current shareholders of ZEL will hold 45%. Sony will also put in Rs 12,000 crore as investment into the new company. Much of this is expected to go to content (IPL rights, originals, films) and technology.

Interestingly, founder-promoter Subhash Chandra, who currently owns less than 1% of ZEL, will get a ~4% stake in the Sony+Zee combined entity. This (as reported earlier) is because in exchange he will sign an agreement that will prohibit him from starting a rival media company.

The current CEO of ZEL Punit Goenka (who is Subhash Chandra's son) will lead the merged company as well.

This seems like a happy ending for Subhash Chandra and co. because a couple of months ago they all were under quite a lot of pressure from shareholders like Invesco, who wanted the CEO to be removed. (Read more about that story here)

On a Lighter Note

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