15th December 2021
Good Morning! 

Another Indian just became the CEO of a major global company. But this time it's not from the world of tech, it's from the world of luxury retail.
Leena Nair is going to take over as the CEO of the French luxury fashion company Chanel next month.
Soon we think at World Economic Forum we will have only Indians.



- 0.29%



- 0.25%



+ 0.14%



- 0.51%



- 1.5 bps



- 1.29%

*As of market close

  • Markets: Yesterday was the third losing day in a row for our markets, with the Sensex and Nifty both being dragged by selling in auto and financial services stocks. But we're not alone. Globally too there's been weakness in financial markets ever since this Omicron thing came to light.


New NBFC Rules
My house my rules

The Reserve Bank of India (RBI) has come out with a set of rules to implement the 'Prompt Corrective Action' (PCA) framework for non-bank finance companies as well.

If you're wondering what in the world all this means, don't worry we'll explain it in simple terms.

PCA is a framework under which banks (and now NBFCs) with weak financial metrics are put under watch by the RBI.

The framework helps the RBI decide if a financier is risky if they slip below certain norms on three parameters — capital ratios, asset quality and profitability.
Lending activities of these banks/NBFCs are then restricted until the situation improves.

These new rules will come into effect in October next year and are aimed at preventing more NBFC-related shocks to our financial system. The IL&FS and DHFL disasters, and the more recent troubles faced by SREI Group and Reliance Capital seem to have had an impact on the regulators thinking.

All this in turn ultimately helps the taxpayer only because it's very very hard to let a large financial institution go under, and they mostly end up being bailed out by the government (which is taxpayer money).

After going into PCA, if the lender manages to recover and does well for 4 consecutive quarters it will then be able to resume normal activity.

Another thing, for those of you wondering why the RBI makes these rules, its because the central bank's work is not limited to setting interest rates and managing monetary policy. The RBI is also the regulator and supervisor of the overall financial system in India.


Not So Sweet 
Sugar in tea

India has lost a dispute at the World Trade Organization over sugar export subsidies given by the government to farmers.

A panel ruled that India violated WTO international rules by offering excessive subsidies for the production and export of sugar and sugarcane.

We're the worlds largest producer of sugar in the world (after Brazil), and having authorised $475 million in subsidies for 2020-21 growing season, the government had already said it'll scale this down.

However, the case at the WTO relates to the 2014-2019 period. In 2019, Brazil, Australia and Guatemala had filed complaints against India saying that our government had incentivized production (via subsidies) to such an extent that it far exceed domestic demand, thus leading to higher exports and lower prices. 

Subsidies for sugar for India are restricted to a de minimis limit of 10% of production value as per WTO rules. Staying below this limit they believe does not distort the market.

In response, our guys have already said that the findings of the WTO are 'unacceptable' to India. They now have 60 days to appeal this decision. Guess we're in for more sugar "taareeks".


Tech Snippets
Money gun

Netflix is getting Cheaper!!
You read that correct - Netflix is indeed getting cheaper here.

Even though Netflix offers its cheapest prices in the world here in India, they haven't been able to grow as quickly as they thought.

Their cheapest plan that costs Rs 199 was launched here 2 years back, but that's only for watching on mobile phones and tablets. Clearly, even that price point hasn't worked as well as they might've thought.

So now the mobile-only plan is down 25% to Rs 149.

The largest price drop is for the basic full-service plan, which comes in standard definition (480p) picture quality. It is now priced at just Rs 199/month, a 60% cut from Rs 499/month.

They have even cut their higher-end plans by Rs 200 and Rs 150.

The issue is that even with some of these rate cuts, Netlfix is still the most expensive streaming service in India.
Prime and Hotstar are a lot cheaper. Hotstar even has its ads based model which has a wider appeal and even Prime is experimenting with that.

Let us hope things work out for them, we don't want them exiting the Indian markets. One tip for Netflix from us is to make Mahabharata into a series again with a Game of Thrones like production value.

Rebel Foods Acquisition Plans
Rebel Foods isn't sticking to its 'rebellious' name anymore, they're joining the likes of Byjus's and GoodGlamm Group with plans to make major acquisitions soon. They've put aside $150 million for this!

And it also looks like they already have their eyes set on what they want to acquire because they're talking about partnering with 40 Indian and international brands.

PS: Just in case you are having a hard time remembering, Rebel Foods is the parent company of many delivery-only brands. Fasoos, Behrouz Biryani and Mandarin Oak are the most popular amongst these.

On a Lighter Note

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