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13th October 2021
Good Morning! 

India registered 14,313 COVID cases yesterday. Our lowest ever count for the past 7 months! Things seem to be improving every day, here's to hoping they get even better.
  MARKETS
 

SENSEX

60,284.31

+ 0.25%

NIFTY

17,991.90

+ 0.26%

US$

75.52

+ 0.21%

GOLD

47,187

+ 0.29%

10-YR

6.33%

- 1.9 bps

OIL

6,064

- 0.70% 

*As of market close

  • Markets: Headline stock market indexes Sensex and Nifty50 recovered intraday losses to close higher for the fourth day in a row yesterday. Most sectors did well with the best performers being auto, FMCG, metal and PSU banking stocks.

Corporate

Adapting To The Digital Age
Digital mona lisa

Tata Motors EV

Tata Motors just announced that they’ll be getting a near billion-dollar investment from private equity firm TPG and its Abu Dhabi based co-investor ADQ.

TaMo will raise this money (around Rs 7,500 crores) to be invested in a new electric passenger vehicle subsidiary. This new company apparently has an equity valuation of over $9billion, giving TPG+ADQ an 11-15% stake with their investment.

TML EV Co. will be an asset-light subsidiary into which Tata Motors will transfer all their EV talent and design capabilities. TML EV then plans to invest over Rs 16,000 crore in the next five years for products, platforms, drive trains and dedicated EV manufacturing and charging infrastructure.

The new arm will aim to launch 10 different EVs over the next 5 years, using partnerships with Tata Power to create charging infrastructure across the country. 

Unity Small Finance Bank

The RBI has granted a small finance bank licence to Centrum Capital and Bharat Pe’s joint venture Unity Small Finance Bank (USFB).

This is actually the first time in 6 years that the RBI has issued a new bank licence, and so naturally both Centrum and BharatPe are saying this means the RBI trusts them to do a good job.

The proposed business model of the bank is one of collaboration and open architecture, and they’re aiming to build Unity as India’s first truly digital bank from the ground up. Centrum’s successful MSME and Micro Finance businesses shall be merged into Unity Small Finance Bank. However, the ~Rs600 crore housing finance business will stay separately with Centrum Capital.

Also, this new bank will now prepare to take over the assets and liabilities of PMC Bank where a
major fraud was uncovered in 2019, leading to a run on the bank.

When the fraud was discovered (thanks to a confession letter from the MD of the bank), PMC Bank was put under RBI supervision and withdrawals were restricted. The fraud has ended up hurting over 9 lakh depositors who had their money at PMC Bank.

Macro

New Data Drop
Dancing computer

What Inflation? 

Inflation data for the month of September is out, and its pretty encouraging!

Retail inflation in India, measured by the Consumer Price Index (CPI) came in at 4.35% for September 2021 - the lowest in many months. And also sharply lower from the 7%+ we had in September 2020.

What makes this great news for the aam aadmi is that food price inflation seems to have eased off significantly - just 0.68% last month and 3% in August.

However, one thing to watch out for here is the global rise in commodity prices, especially crude oil. Brent crude is trading near 7-year highs and a further increase in price can cause problems for our national (and personal) finances.

Industrial Output

Some more positive macroeconomic data - industrial production in India grew by 11.9% in August 2021, compared to August 2020.

Data published by the National Statistical Office shows that we have now surpassed pre-Covid levels in terms of output in the manufacturing, mining and power sector.

Industrial production had actually fallen 18.7% in March 2020 after the pandemic broke out, and remained in the negative zone till August 2020. 

Now things are definitely looking up as the latest data shows mining sector output rose 23.6% in August, while power generation increased 16%. Let’s hope this coal shortage doesn't end up hurting growth too much!🙈

Tech

Fintech Funding
Dancing computer

Indian fintechs had quite the day yesterday - 2 of them raised large sums of money.

Neo-bank Raises

Neo-Banks have been getting pretty popular over the past 2 years or so.
One of the neo-banks for businesses -- Open just raised $100 million.

A quick note - none of these neo-banks actually have a banking license, they basically partner with existing banks and provide a good UI with some additional features.

Open has partnered with ICICI Bank for the creation of accounts.
In terms of features, they provide almost everything a business would need on top of what a normal bank would provide.
They provide services like bookkeeping, expense management, employee payment and taxes. What more could you ask for, right?

You must be wondering if traditional banks have all these services too? Well, they do have some of them but they charge a huge amount. And for small businesses paying that much just isn't feasible.

Clearly what Open has been doing has struck a chord.
They have 100,000 business users and are processing $5 billion in annual transactions!

Post this round their valuation is reportedly at $500 million.

Fintech Infra Provider Also Raises

M2P Fintech has also gone on to raise $35 million.
Some of you may remember the fintech infrastructure startup YAP.

YAP has decided to rename itself as M2P Fintech. Frankly, we liked YAP a lot better, but what do we know 🤷‍♂️.

YAP provides companies with the building blocks to insert financial services within their applications.
They basically act as a technology layer between a financial institution (like banks) and a brand (like fintech players).
Their building blocks are all through the fintech stack btw. So they provide APIs (explanation here) across payments, banking and yes the famous 'L' word that all our Indian startups love-- lending.

Most of the poster boys of the startup world here use YAP. Ola for Ola Money, PaisaBazaar, CRED, Slice etc are all customers.
YAP has actually been around for many years now. They were a bootstrapped company for almost 5 years before they raised 2 rounds of funding last year.

YAP already serves customers in the UAE, Australia and New Zealand and they plan to expand to a lot more countries with this round of funding.

On a Lighter Note

Campus Ambassador Program

If you are a college student do check out our campus ambassador program. 
Follow this link for the deets.

If you have more time ...

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