Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: On April 15, Indian benchmark indices experienced a decline for the second consecutive session, with the Nifty hovering around 22,300. The Sensex closed down by 845.12 points at 73,399.78, while the Nifty was down by 246.90 points at 22,272.50.

BUSINESS

Jio Financial Services and BlackRock Form $300 Million Joint Venture

What happened

Jio Financial Services, a subsidiary of Reliance Industries, has struck a significant deal with BlackRock, a leading US-based investment firm. This collaboration, unveiled on April 15, involves a 50:50 joint venture focused on expanding wealth management and broking services within India.

The joint venture's immediate agenda includes launching a wealth management company followed by establishing a brokerage firm, as disclosed in an exchange filing.

Why it matters

This partnership carries substantial weight in India's financial realm. With a joint investment of $150 million each from both parties, totalling $300 million, their aim is clear: to cater to the rising demand for sophisticated wealth management solutions in the Indian market. 

• In the quarter ending December 2023, Jio Financial witnessed a notable 56% decline in its consolidated net profit, totalling ₹294 crores.
  
  

• Additionally, the company's consolidated revenue from operations saw a nearly 32% drop compared to the previous quarter, amounting to ₹413 crore.
  
  

• During the same period, Jio Financial's total expenses increased to ₹98.95 crore, up from ₹71.43 crore in the September quarter.

The agreement not only showcases Jio Financial's strategic diversification but also underscores its ambition to solidify its position in the financial services sector. Furthermore, this joint venture strengthens the already robust partnership between Jio Financial Services and BlackRock, signifying their shared commitment to modernizing India's asset management industry.

Zoom out

The collaboration between Jio Financial Services and BlackRock represents a significant leap forward in the evolution of wealth management and broking services in India. Pending regulatory approvals, this joint venture is poised to revolutionize investment opportunities in the country.

Jio Financial's ongoing focus on digital-first solutions, coupled with BlackRock's global expertise, sets a promising stage for delivering accessible and innovative financial products to investors nationwide. 

BIG MONEY MOVES

Lighthouse Funds pours ₹700 crore into Parsons Nutritionals

Private equity giant Lighthouse Funds has injected ₹700 crore into Parsons Nutritionals, a renowned contract manufacturer in the FMCG industry. This investment marks Lighthouse's third venture from its robust $425 million Lighthouse India Fund IV, signalling confidence in Parsons' growth potential and market position.

Parsons serves as a pivotal third-party contract manufacturer for major FMCG players such as Mondelez, Hindustan Unilever Ltd, Britannia Industries, and General Mills. The company has established a strong presence across multiple states with a diversified product portfolio encompassing cookies, confectionery, malted beverages, and personal care items like shampoos and soaps.

Ambuja Cements expands footprint with Tuticorin Grinding unit acquisition

Ambuja Cements, under the Adani Group's umbrella, has finalized an agreement to acquire a grinding unit in Tuticorin for a sum of ₹413 crore. This strategic move, executed in collaboration with My Home Industries, adds a production capacity of 1.5 million tonnes per annum to Ambuja's existing operations. 

The Tuticorin grinding unit, situated near the Tuticorin Port and sprawling across 61 acres, comes with the advantage of a long-term fly ash supply agreement for raw material sourcing. Ambuja Cements views this acquisition as a catalyst for expanding its presence in the southern markets of Tamil Nadu and Kerala.

BUSINESS

Sharechat Raises $49 Million to Boost Tech and Monetization

What happened

Sharechat, the popular social media platform, has successfully raised $49 million through convertible debentures from its existing investors. This funding round was led by prominent names such as Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures, and HarbourVest.

The company plans to utilize these funds primarily to enhance its ad targeting technology and improve consumer transactions on Sharechat and its short-video platform Moj.

Why it matters

This fundraising is crucial for Sharechat as it navigates challenges like declining ad revenues and key executive departures. With a valuation of $5 billion after raising $300 million in funding back in 2022, Sharechat aims to strengthen its monetization strategies and move towards profitability.

• Sharechat, with over 325 million monthly active users, has expanded its portfolio through strategic acquisitions, including Times Internet-backed MX Taka Tak, and fashion peer-to-peer marketplace Elanic.
  
  

• In FY23, Mohalla Tech, the parent company of Sharechat, reported a significant 72% widening of its loss to ₹5,144 crore.
  
  

• Despite the loss, Mohalla Tech saw a remarkable 71% growth in total income, reaching ₹718 crore during the same financial year.

  
  

Zoom out

However, ShareChat's recent valuation has declined by over 60% to below $2 billion, following its latest funding round. Despite the setback in valuation, ShareChat's strategic approach, highlighted by the $49 million debt financing from existing investors, reflects its determination to navigate market challenges and sustain growth.

The company's focus on enhancing ad targeting technology and bolstering consumer transactions on ShareChat and Moj demonstrates a proactive stance towards operational profitability.

BIG PICTURE

🙃 Tesla cuts 14,000 jobs due to EV demand downturn

Tesla, the renowned electric vehicle manufacturer, has announced plans to cut over 10% of its global workforce due to a slowdown in demand for electric vehicles. The decision was communicated via an internal email from CEO Elon Musk to Tesla employees. Tesla's global workforce stood at 140,473 employees as of December 2023, according to its latest annual report. If implemented across the board, this workforce reduction could impact at least 14,000 employees worldwide.

🚆 Ramkrishna Forgings secures ₹270 crore order for Vande Bharat trains

Ramkrishna Forgings Limited has clinched a substantial order worth ₹270 crore from the BHEL-TRSL consortium for manufacturing 32 sets of sleeper coaches for the Vande Bharat trains.

The project entails developing and validating bogie frames for the sleeper version of the Vande Bharat train sets, comprising 1,024 bogie frames for 32 train sets, each consisting of 16 coaches. Following this positive news, Ramkrishna Forgings Limited's stocks surged by nearly 3% during early trading on April 15, reaching ₹708 per share.

BUSINESS

PVR Inox Reveals Expansion Strategy For Southern States

What happened

PVR Inox, a prominent player in India's multiplex industry, is strategically focusing on the South Indian market to revamp its operational performance. This move comes amidst challenges faced by the cinema sector due to content scarcity and reduced footfall.

Ajay Bijli, the MD of PVR, revealed that the South market constitutes a significant portion of their business, with 33% of their portfolio comprising 588 screens out of a total of 1,741 screens. In a bid to capitalize on high-consumption regions, PVR Inox plans to allocate 40% of its new screen launches in FY25 to the South, leveraging the region's robust average occupancy rates.

Why it matters

This strategic shift towards the South reflects PVR Inox's commitment to optimizing its capital deployment for maximum returns. Bengaluru, in particular, stands out as a lucrative market for the company, evidenced by the recent successful launches of megaplexes in the city. With a diverse audience consuming movies in various languages, Bengaluru has become a cornerstone of PVR Inox's growth strategy, with plans for further expansion in high-consumption cities.

To bolster financial efficiency, PVR Inox is adopting an asset-light model, emphasizing the franchise-owned company-operated (FOCO) approach. This shift aligns with the company's goal of reducing capital expenditure by 30-40% in FY25 while focusing on profitable ventures.

Zoom out

PVR Inox's strategic initiatives, including expanding in high-return markets, reducing capital expenditure, and embracing an asset-light model, signify a proactive approach to navigating challenges in the cinema industry. With plans to open 100 new screens and disinvest in non-performing assets, coupled with innovative partnerships like the collaboration with Zomato for in-cinema food delivery, PVR Inox is gearing up to drive profitability in the coming fiscal year. 

MIRCH MASALA

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