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12th January 2022
Good Morning! 

Hope you are all well! We are back to lockdown days here in Delhi. Yes officially we aren't in a lockdown but almost everything is shut including private offices now. Anyway by some models we should have our peak both in Delhi and Mumbai this week, lets hope that's true and the peak doesn't just keep increasing.
  MARKETS
 

SENSEX

60,616.89

+ 0.37%

NIFTY

18,055.75

+ 0.29%

US$

73.91

- 0.17%

GOLD

47,690

+ 0.50%

10-YR

6.57%

- 2.3 bps

OIL

5,998

+ 3.50%

*As of market close

  • Markets: Sensex and Nifty50 were up for the third day in a row, led by buying seen in IT, financial and oil & gas stocks. Metals and consumer stocks were down though and limited the upside for the headline indexes.

Telecom

Hello, Government?
Man talking on 2 phones

Vodafone Idea hogged all the news early yesterday because before markets opened, the company announced they'll be converting part of the debt they owe to the government into equity.

The stock fell more than 20% on this news because of the huge dilution shareholders will face.

As part of the rescue deal offered by the government to telecom companies, they were offered a 4 year moratorium period for repaying their spectrum and AGR dues to the government. After 4 years, the telcos would have the option to convert the interest amount into equity and thus give the government a share in the company.

And that's what Vodafone Idea has opted for. The interest amount owed to the government is Rs 16,000 crores, and shares of VI worth that much will now be issued to the gov.
This will make the government the largest shareholder in the company with a ~36% stake. Existing shareholders will thus be diluted, and this includes the Vodafone Group as well as the Birlas.

Shares to be issued to the government were priced at Rs 10 each, and seeing this the stock price also came tumbling down from ~Rs15 to close at 11.85.

Even after doing all this, VI still has a lot of liabilities. The principal amount to be paid for AGR dues + spectrum dues to the government is over Rs 1.70 lakh crores!

The other telecom company to opt for the same offer has been Tata Teleservices. They have chosen to convert Rs 850 crores of interest payable into equity, thus giving the government a 9.5% stake in their company.

Now whether this is good or bad for the telecom sector, only time will tell.
On one hand, we can see the results of the government running a telecom company by looking at the state of BSNL and MTNL (it's not good).

On the other hand, some experts are saying that this might be better from a regulation/policy perspective since now the government's money is at stake and so they could bring an end to the ultra-low prices we've seen over the past few years, which have arguably caused this mess.

Tech

Show Me The Gold
Money gun

The startup that provides gold loans Rupeek just raised another $34 million and is now valued at $634 million.

You are probably what's so special about Gold Loans and why is this under Tech.

Rupeek offers gold loans online. No no you don't just send a photo of your gold and get a loan.

Rupeek offers ‘doorstep gold loans’. Using technology to complete the loan underwriting and disbursal process makes it really easy for them to hand out loans. In fact, they claim they hand out loans within 30 minutes.

By cutting down on expenses with an online-only strategy, Rupeek offers gold loans at an interest of 0.89% per month.

As you know we Indians just love our Gold so offering loans for it in a simple way is quite convenient. It probably comes as no surprise to you that Rupeek has already given out loans worth over Rs 6,500 crore and in fact, 55% of its customers are first-time borrowers.

Indians are known for their love of gold. We already import ~$400 billion worth of gold and a significant portion of this goes to individuals/families requirements.
Rupeek definitely seems to be in a great market. So when do you think they enter the club?

On a Lighter Note

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