Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: The Sensex and Nifty have hit record highs, fueled by strong performances in the auto, FMCG and pharma sectors. Domestic and global factors, along with progress in the monsoon season and upcoming first-quarter earnings, are driving market momentum, while positive FII inflows add to the optimism.

BUSINESS

Hyundai’s $3.5B IPO Faces Bumpy Ride with Tata and Mahindra

What happened

Hyundai Motor Co. is feeling the heat in India, as Tata Motors Ltd. and Mahindra & Mahindra Ltd. are hot on their tail, trying to snatch the No. 2 spot. 

• The South Korean automaker, preparing for a massive $3.5 billion IPO of its local unit, sold 13.5% of all passenger cars in India last month. 
  
  

• Tata Motors, is breathing down Hyundai’s neck with a 13.2% share, while Mahindra is right behind with 12.4%.
  
  

•  Maruti Suzuki Ltd. remains the big boss with a whopping 40% market share. 

Why it matters

The race for market share in India, one of the world’s fastest-growing automobile markets, couldn’t come at a worse time for Hyundai. 

• The company is throwing money at the future, investing ₹200 billion ($2.4 billion) into electric vehicle (EV) development and 
  
  

• Another ₹70 billion into a second plant, set to go live by late 2025. 

Their strategy includes launching an electric version of the popular mid-size SUV, the Creta, in early 2025 to win over environmentally-conscious drivers.

Meanwhile, Tata Motors and Mahindra are not just sitting around. Tata is busy expanding its EV lineup with 10 new models by fiscal 2026, while Mahindra plans to drop ₹270 billion over the next three years to boost its SUV and EV production. And Maruti Suzuki? Despite being the kingpin, they don’t even have a single battery-powered car. 

Final words

Hyundai’s ambitious plans for EV development and increased production capacity are steps in the right direction, but the competition is fierce. With Tata’s stylish and competitively priced vehicles and Mahindra’s robust SUV offerings, the pressure is on Hyundai to innovate and adapt quickly. 

BIG MONEY MOVES

L&T acquires SiliConch Systems for ₹ 183 crore

Larsen & Toubro (L&T) has plunged into the semiconductor pool with a splashy ₹183 crore acquisition of Bengaluru's SiliConch Systems. Set to wrap up by September, this deal involves ₹133 crore upfront and a delayed ₹50 crore, depending on hitting targets.

SiliConch, born in 2016, brings 30 patents to the table, specialising in chip designs for power gadgets like smartphones and cars. 

Vedanta plans ₹1,000 crore debt raise amid demerger strategy

Vedanta Ltd is gearing up to raise ₹1,000 crore by issuing non-redeemable non-convertible debentures (NCDs) that will last for 15 months and have an interest rate linked to MIBOR*. They'll pay 3.75% more than the one-month overnight indexed swap rate.

With a hefty ₹71,759 crore in debt, Vedanta plans to split its businesses into separate entities to dodge financial potholes. But amidst all this financial acrobatics, Vedanta Resources Ltd (VRL) is still doing the debt dance, trying to balance between dividends and debt repayments.

FYI: MIBOR stands for Mumbai Interbank Offered Rate. It is the interest rate at which banks in Mumbai lend to one another in the Indian interbank market.

BUSINESS

Prosus Drives $100 Million Investment Surge in BlueStone

What happened

Prosus, a Dutch investment giant, is set to spearhead a $100 million funding round for BlueStone, a rising star in the jewellery industry. This infusion will twinkle BlueStone's valuation up to a dazzling $960 million, more than doubling it from $440 million just last September. The funding mix includes both primary boosts and a touch of secondary share sales, with $60 million dedicated to ramping up BlueStone's glittering operations.

Why it matters

Prosus, famed for its $7 billion splurge on unicorns like Meesho and Swiggy, this is a grand return to big-ticket investments after a strategic breather. The broader context is crucial: Indian tech startups faced a 13% decline in funding in the first half of 2024 compared to the previous year, with seed-stage, early-stage and late-stage funding all seeing varying degrees of decrease.

However, in the jungle of Indian tech startups, where funding vines are swinging a bit lower this year, BlueStone has emerged like a shiny gemstone. 

•  The company's revenue surged to ₹788 crore from ₹476 crore previously, accompanied by an impressive reduction in losses from ₹1,268 crore to just ₹167 crore. 
  

Zoom out

The rollercoaster ride of funding for Indian tech startups in 2024 has been a tale of ups and downs. The number of funding rounds plummeted by 54% to 540, reflecting cautious investor sentiment 

Despite these challenges, there's a glimmer of optimism. Compared to the second half of 2023, overall funding in the first half of 2024 edged up by 4% to $3.96 billion. April stood out with the highest monthly funding of $862 million, indicating periodic spikes of investor confidence. 

BIG PICTURE

Microsoft China asks employees to switch to iPhones

Microsoft is shaking things up in China, switching from Android to Apple iPhones for its employees starting this September. Employees using Huawei and Xiaomi phones will receive an iPhone 15 as a one-time replacement. This change is driven by the need for better security and access to critical authentication apps, which are unavailable on Google's mobile services in China.

This move is part of Microsoft's Secure Future Initiative, launched to combat cyber threats and enhance security measures. By switching to iPhones, Microsoft aims to improve security protocols and streamline mobile device management.

India powers up in disputed territory, raising eyebrows in Beijing

India is charging ahead with a bold $1 billion plan to build 12 hydropower stations in Arunachal Pradesh, a region that China claims as well. Finance Minister N. Sitharaman has approved up to ₹ 7.5 billion ($89.85 million) in aid for each project. In total, ₹90 billion will support these hydropower ventures.

This move is bound to catch China's attention. Both nations have been busy upgrading their border areas after recent clashes. This hydropower push is part of a $11 billion strategy to strengthen its border infrastructure.

BUSINESS

Birla Opus Spreads Colors Across India

What happened

Birla Opus, the fresh face in India's colourful paints market, is painting the town red with its rapid expansion plan. Within just six months of launch, they've spread their vibrant palette to over 300 towns across India, from the north's Punjab plains to the bustling streets of Maharashtra and beyond.

Their strategy includes rocking trade expos, gifting dealers with free tinting machines and pricing their paints like a budget miracle—15-20% cheaper than Asian Paints.

Why it matters

Birla Opus is taking a bold leap by expanding its distribution to over 300 towns, each boasting populations over 100,000. Their ambitious target? Achieve a whopping ₹10,000 crore in revenue and turn profitable within three years of inception. Driving this growth are three new manufacturing plants set to open in FY25 in Chamarajanagar (Karnataka), Mahad (Maharashtra) and Kharagpur (West Bengal), aimed at boosting production and market reach.

This aggressive strategy not only takes on Asian Paints, which holds over 50% market share but also taps into the growing demand driven by infrastructure development and home improvement projects across India. With innovative tactics like strategic pricing and their popular 'Make Life Beautiful' campaign, Birla Opus is winning hearts and industry accolades alike.

Zoom out

In the past year, several major players have entered the domestic paints market, aiming to ride the sector's growth wave. Notable entrants include JK Cement, Astral Pipes, Infra.Market and Pidilite Industries. The JSW Group, which ventured into paints in 2019, has already achieved a revenue milestone of ₹2,000 crore in FY24 and turned profitable.

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