India is seeing an explosion of non-bank digital lending apps.In recent days, the digital lending sector has come under the scanner for coercive collection tactics, sky-high interest rates and fraudulent business practices.On January 13th, the RBI formed a Working Group to create a regulatory framework for these online lenders.Yesterday, Google said it had removed an undisclosed number of these lending apps from its Play Store to safeguard users.What are some of these micro lenders accused of?Of providing small loans swiftly and with no questions asked - often with no regard to the borrower’s credit history.These loans are usually offered at exorbitant interest rates - sometimes as high as 500%!Additionally, when borrowers install these apps, they are forced to share an abysmal amount of personal data including all their contacts, their location, gallery images etc.This data in turn is used by the apps to coerce repayments.Click link to know more about the dark underworld of digital lending apps in India: https://transfin.in/rbi-and-google-take-action-against-digital-lending-loan-apps
Byju's is at it again.The edtech giant is reportedly all set to acquire coaching centre chain Aakash Educational Services for $1bn.The deal, which could close in the next two or three months, would be one of the largest in the edtech space.And it would combine Byju’s digital prowess with the brick and mortar presence of Aakash, allowing the former to scale up considerably.The Byju’s-Aakash deal also signals a promising start to 2021 for Indian edtech.The sector had a stellar 2020 as over 320 million students were forced to adapt to online education since schools and colleges were shut for the better part of the year.Investors have been paying attention.VC firms pumped in $1.8bn into Indian edtech startups through 2020 across 60 deals, propelling edtech to become the most-funded sector in 2020.But will the boom last?Or is Indian edtech a bubble waiting to burst?Click link for a deep-dive: https://transfin.in/edtech-startup-byjus-set-to-acquire-aakash-educational-services-for-1bn
Add to cart!E-commerce businesses entail a digital presence from product discovery to transaction and everything in between.This phenomenon has evolved from simple marketplaces where Indians got acquainted with online shopping.Today, social e-commerce has made the process more interactive to communicate with consumers.Time is of the essence in technology and it involves both infrastructure as well as trust in online transactions.In a dense and deep country like India, managing average variable costs is essential to determine the future of positive free cash flows.And with low Average Order Value, this is cause for concern.That is what matters next- the ability to manage high average variable cost especially when it does not reduce with scale in business.In all likelihood, e-commerce will be modelled after the ability to solve these problems.
The mutual fund-a for investment!Mutual funds are well-known when it comes to investing, but a new investor may be unaware of the underlying costs and fees involved.Investment in mutual funds is done with an asset management company (AMC).In order to prevent an investor from redeeming his funds before a certain time, an exit load at a percentage value is charged.Every AMC needs to manage its day-to-day workings, market its funds to other investors and cover costs.This is covered under the Expense Ratio payable by the investor.Depending on the nature of the fund and the plan, the charges vary.However, the overall impact is reflected on the returns.Taxation also forms a crucial part of investment which is determined by the holding period and nature of the scheme.
Ghosts of stocks past and future!The 35% shakeout in the S 500 back in March became a massive buying opportunity.As the market recovered with the monetary and fiscal stimulus and news of a vaccine emerged, a rotation from Growth to Value stocks was noticed.December saw tech stocks move up.The vaccine also brought with it news of OPEC agreeing to reduce supply which pushed up oil prices.On the one hand, risk assets generally benefitted and on the other, gold and silver remained range-bound.As time goes, COVID-sensitive stocks may just continue to recover.As central banks and governments roll out vaccines alongside monetary and fiscal measures for economic recovery, the influence on stocks will be prominent.With high unemployment, liquidity will either be hoarded or moved to the stock market.
Since last week, WhatsApp users have been receiving in-app alerts regarding updated privacy rules and terms of service.If users do not consent to the new terms before February 8th 2021, they are likely to lose access to most of the messaging app’s services.The new rules affect most of WhatsApp’s 2 billion+ user base and have privacy-focused users worried.As a consequence, the update has sparked a user exodus of sorts to “safer” messaging services - most notably, Signal and Telegram.Click link to learn about the messaging platform's new policies and how it plans to use your data going forward: https://transfin.in/whatsapp-new-privacy-policy-sparks-user-exodus-to-signal-and-telegram
Bengaluru-based B2B startup Udaan has raised $280m and is now valued at more than $3.1bn.The company has become eponymous with the growing digitisation of India’s B2B e-commerce scene - a sector that is expected to grow at a CAGR of c. 20% till FY25.What does Udaan do exactly?And what are the challenges and opportunities faced by India's B2B sector?Here's an overview: https://transfin.in/a-look-at-the-b2b-e-commerce-sector-in-india
Vexed about Covaxin!India is prepping for a massive immunization programme across the country after the approval given to Covishield and Covaxin for emergency use.The indigenously-made Bharat Biotech’s Covaxin has raised criticism and questions regarding its efficacy.Biotech began Phase III trials with 25,800 participants and even though no safety concerns were reported, the trial data remains unpublished.The nature of approval puts in conflict the accelerated approval process against clinical trial mode to monitor potential side-effects.Depending on scale and employability, India follows a precise procedure before it is adopted for mass use.Given the discovery of new strains of the virus, and the scale of the pandemic the approval to Covaxin may have been granted.Click.on the link below to read further.
In 2021, the world will start to look beyond the coronavirus.There are so many things to look forward to - the beginning of the electric vehicle era, decisive action against climate change, a string of high-profile IPOs, the ramifications of Brexit, economic recovery across the world, continuing backlash against Big Tech, and mass inoculations against COVID-19.How well-acquainted are you with the business and finance trends expected to dominate the new year?Let's find out!Click to Quiz: https://transfin.in/the-2021-quiz-what-to-look-out-for-in-new-year-2021-india
Get out of anti-trust case free card!Reliance Retail, launched in 2005, has a sales presence through11,784 stores and sales worth ₹1,62,936cr ($22.3bn).With an expansion strategy fuelled by help from digital vectors and capital deployment, it is the largest retailer today.The company plans to grow further by enlisting mom-and-pop stores which dominate the retail sector.Reliance has also entered allied serviced in logistics, AI and more to percolate to Tier 2 and 3 cities in an effort to combine the strengths of Jio and retail.The only obstacle being the arbitration case with Amazon which hinders its deal with Future Group.While the Competition Commission of India looks into anti-competition as a test for monopolies, the “doctrine of failing firm defence” to umbrella the entire retail segment may rescue Reliance.The real test will be how it contributes to the growth of the industry.Head to the link below to read more.https://transfin.in/the-rise-of-reliance-retail-how-the-company-is-on-the-cusp-of-monopolising-the-sector
On June 4th 2019, DHFL defaulted on ₹900cr ($122.6m) worth of due payments.Its CPs’ rating was downgraded to “D” overnight and a long and painful reckoning commenced, which has sent its share price into a tailspin.Today, as we wait for the NBFC's creditors to reach a verdict on who gets to buy DHFL's assets, one can only hope that 2021 will be kinder on India’s NBFCs, let alone on DHFL.DHFL's fall from grace, insolvency proceedings and the prolonged bidding process for sale of its assets constitute a saga that continues to this day.How did the lender find itself in its present situation?
Tesla may be (finally) coming to India.Transport Minister Nitin Gadkari has said that the US electric vehicle manufacturer would be available in India from early 2021.It would begin “first with sales for its vehicles” and, based on demand, might also scale up to set up manufacturing facilities as well.Tesla's entry sheds light on something very pertinent: What are the challenges and opportunities in the country's electric vehicle sector?Click link for a deep-dive: https://transfin.in/tesla-india-launch-elon-musk-company-may-enter-indian-markets-in-early-2021
At least four major private equity (PE) giants are reportedly in a race to acquire a controlling stake in Mphasis, the Bengaluru-headquartered IT services company that was bought by the Blackstone Group in 2016.A buyout of Blackstone’s 56.16% stake in Mphasis would signify Blacksone’s biggest payday in India.The Mphasis acquisition cost c. $1.1bn - the largest investment Blackstone had made in the country.The deal has paid off handsomely for the world’s largest PE firm, with Mphasis having seen its share price rallying nearly 66% in the past year and 3x since 2016.What does Mphasis do and how did Blackstone turnaround its prospects after acquiring it?Hit link to read:https://transfin.in/blackstone-stake-in-mphasis-up-for-grabs-as-pe-giant-mulls-exit
All hail the cab guidelinesWhile Ola and Uber do not have perfect track records with regards to enforcement of safety regulations, they do have a competitive edge in commercial transport.The two companies appealed to the Union Government for a review on the guidelines which require them to uphold drivers’ qualification standards.The guidelines and regulations which include price caps, test facilities to check a driver’s abilities, language requirements on the app, and more increased governance for Ola and Uber.This interplay becomes complex when the two insist on being recognised as IT and not transport companies.Simply being “intermediaries” to avoid the responsibility of guaranteeing safety to drivers and passengers as well as the resulting costs may not be enough.The judiciary has read the IT Act to include due diligence as necessary for facilitators.The Government will have to balance the social responsibility conferred upon the companies along with the increase in costs and complexities involved.Click on the link below to read.https://transfin.in/why-are-uber-and-ola-not-pleased-with-the-new-guidelines-for-online-cab-aggregators
2021 has gotten off to a rocky start for Reliance Industries.Last week, SEBI fined the conglomerate and its Chairman Mukesh Ambani a total of ₹40cr ($5.48m) for allegedly violating share trading rules in 2007.According to SEBI’s order, RIL executed a well-planned operation 13 years ago when it sold a 5% stake in Reliance Petroleum (RPL).This involved hiring 12 shell companies to take short positions on RPL future contracts in the derivatives market using inside information and in violation of SEBI guidelines.All to make a killing from the stake sale.This might seem like a string of enigmatic words, so let’s break it down a little…Click link for an explanation of the case against RIL:https://transfin.in/sebi-fines-ril-and-chairman-mukesh-ambani-over-allegedly-fraudulent-share-trades-in-2007
Global economy received a never-before-seen setback in 2020 when growth machines steaming ahead in full propulsion were hamstrung by a global pandemic!However, as effects of the economic lockdowns began to recede, the machines managed to pick up pace very soon and pulled the economy out of the abyss in spectacular fashion.Let's see if you have been paying enough attention to some of the remarkable events witnessed in business, finance, tech and other sectors this year.Take the quiz to find out!https://transfin.in/world-business-quiz-2020-biggest-business-and-financial-events-of-the-year
A Cairn do attitude!The Permanent Court of Arbitration at the ICJ ruled against the Indian Government for applying retrospective tax obligations on Cairn Energy.The Government has been ordered to pay damages worth ₹8,000cr ($1.2bn).This comes within three months of a similar judgement in Vodafone’s case.The Government had introduced an amendment to the Union Budget Bill of 2012 which allowed levying taxes on capital gains from foreign companies which gain value from assets based in India.After the initiation of arbitration, the Government sold 5% out of the 9.8% stake Cairn held in Vedanta.The ICJ said that the retrospective tax emerged as a fiscal measure and was not exactly a tax dispute thereby violating the India-UK Bilateral Investment Treaty.The Government has challenged the Vodafone ruling.Who will emerge victorious remains a curious question.To know more, head to the link below.https://transfin.in/the-cairn-arbitration-ruling-against-india-is-it-time-to-rethink-retrospective-taxation
A Brave New WorldWith the conclusion of US elections and availability of several vaccine options, financial market uncertainty has eased.However, evidence of return to value investing is a bit premature.Technology trends seem to continue.After the elections, US bond yields moved higher from an all-time low of 32bp in March.Initial bond market and yield fears were dispelled.However, in the long-term, these concerns may be justified.Despite the rise in oil prices, the energy sector remains cautious.The stock market still waits to settle down with administrative changes which may continue beyond Biden’s inauguration.
Apps for budgeting har-money!Saving and budgeting is integral to having healthy finances.The old pen and paper style may not work for the digitally-oriented.Several apps offer personal budgeting on the go.Using the multi-currency, infographics, linkage to bank and other accounts, one can manage and sync their budgets across devices.These apps are directed towards catering to your needs with custom options.Personal finance covers a wide range of features.While it may seem cumbersome, budgeting is not for any specific class, but for all those who intend to plan their finances better.Find your best fit and strengthen your wealth management.Click on the link below to read further.https://transfin.in/top-personal-budgeting-apps-to-use-in-india
This week in LongShorts, we talk about the SME ecosystem in India...from a "relationship-building" perspective!Our guest this episode is Jitesh Agarwal, with whom we discuss how startups and SMEs in India are functioning and the challenges they continue to face in the wake of COVID-19.The pandemic has brought about a lot of changes in management and investment attitude, and this has no doubt forced the SME sector to adapt accordingly.Head to the link below to listen in!https://transfin.in/how-to-advise-small-businesses-during-the-covid-19-pandemic-with-jitesh-agarwal-of-treelife