Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: The market rallied nearly 2%, with Nifty and Sensex closing near their highs at 24,834 and 81,332, driven by robust IT and Metal stock performances and significant rollovers to the August series. This surge suggests that bulls are in control, likely leading to further advances, but investors should remain selective, focusing on index majors and large midcaps.

BUSINESS

UltraTech Cement Snap Up a Major Stake in India Cements

What happened

UltraTech Cement, India’s largest cement producer, has just dropped a bombshell—announcing it will acquire a 32.72% stake in India Cements from its promoters and associates for ₹3,954 crore. And that’s not all! This deal triggers a mandatory open offer, potentially raising the total acquisition cost to ₹7,100 crore.

This move aims to cement (pun intended) its presence in the Southern market, especially in Tamil Nadu. This follows UltraTech’s recent splurge of ₹1,889 crore for a 22.77% stake in India Cements, picked up from billionaire investor Radhakishan Damani and friends.

Why is this a big deal?

Well, let’s break it down. Firstly, this acquisition is UltraTech’s strategic masterstroke to expand its footprint in the competitive Southern market. India Cements has a capacity of 14.45 million tonnes per annum (MTPA), mostly in Tamil Nadu. UltraTech is essentially grabbing prime real estate in the cement world.

With this, they can rethink and maybe even postpone their current capacity expansion plans. UltraTech already has a stronghold with 25 MTPA in South India and plans to add another 10 MTPA by FY27.

This isn’t just a power move; it’s a chess game! UltraTech’s main rival, the Adani Group, recently acquired Penna Cement for ₹10,422 crore, adding 14 MTPA to their arsenal. UltraTech’s move is a clear counter to Adani's aggressive expansion.

Analysing the cement battlefield

UltraTech’s aggressive acquisition strategy is all about solidifying its numero uno status. The ₹3,954 crore investment in India Cements enhances UltraTech’s market clout, providing operational efficiencies and ready assets in the South. While this move strengthens UltraTech's position against competitors like Adani Group, industry analysts are a bit split.

Some hail it as a necessary power play to keep Adani at bay, while others wonder if it’s a bit of an overkill, given UltraTech’s existing capacities. But hey, in the quest to reach a 200 MTPA capacity by 2028 and become a global building solutions champion, UltraTech is definitely playing to win.

BIG MONEY MOVES

Ather Energy raises ₹60 crore debt ahead of IPO

Ather Energy secured ₹60 crore (over $7 million) in debt from Stride Ventures, marking its second debt infusion in two months. Previously, Stride Ventures invested ₹200 crore in May. Ather, which is now a public company, has raised around $450 million to date, including investments from Tiger Global and Hero MotoCorp.

Despite a slight dip in revenue to ₹1,754 crore in FY24, Ather remains the fourth largest two-wheeler EV manufacturer. The company plans to invest ₹2,000 crore in a new manufacturing plant in Maharashtra.

WayCool lays off 200 employees amid funding crisis

Chennai-based WayCool Foods has laid off over 200 employees, marking its third round of layoffs in 12 months due to a funding crisis. Previously, the agriculture supply chain startup cut over 300 jobs in July last year and 70 in February. The latest layoffs affected staff in Chennai, Bengaluru, Hyderabad, and subsidiaries CensaNext and BrandNext.

Financial woes have delayed salaries and halted vendor payments. WayCool stated it is simplifying and automating roles to achieve profitability. Despite these efforts, the company continues to face significant financial challenges.

BUSINESS

WazirX's $230M Loss: Customers to Share the Burden

What happened

WazirX, India's cryptocurrency exchange, made waves on Saturday with its plan to "socialize" the $230 million loss from a recent security breach. The Mumbai-based platform, which halted trading last week after a cyber attack compromised nearly half of its reserves, is now distributing the loss among its users.

In this heist, over 200 different cryptocurrencies were stolen, including popular tokens like Shiba Inu, Ethereum, Polygon’s MATIC, and the meme coin Pepe. WazirX’s response? Rebalance customer portfolios by returning 55% of their holdings while locking the remaining 45% in USDT-equivalent tokens.

Why it matters

This bold move has left the local crypto community reeling. Even customers whose tokens weren’t directly affected will face the impact. Essentially, if you had 100% of your tokens untouched, you'll still get only 55% back, with the rest converted and locked.

WazirX founder Nishal Shetty, in a one-way call, confirmed the absence of insurance for customer funds and highlighted the lengthy, uncertain recovery process. This situation also raises questions about WazirX’s role, as it seems to control user crypto assets directly, not just act as an exchange.

Zoom out

In an unprecedented move by an Indian crypto exchange, WazirX is rolling out a socialized loss strategy, setting a deadline of August 3 for users to vote on the recovery plan. Users can choose between two options: trading with restricted withdrawals (Option A) or trading and withdrawals with lower recovery priority (Option B).

The firm promises a faster, more flexible solution compared to the usual years of uncertainty. As WazirX navigates this crisis, users are left hoping for a swift and fair resolution.

BIG PICTURE

BRICS' new payment system to ditch the dollar

BRICS is plotting a financial revolution, aiming to sidestep the Western SWIFT system with a homegrown version. Russia's Deputy Chairman, Alexander Babakov, champions this move to forge a "new economic reality."

This SWIFT alternative will integrate with national systems and ensure top-notch security, potentially giving Uncle Sam's greenback a run for its money. India's all in, with IISc's director, Narain Roy, calling for a thorough stakeholder discussion. If this takes off, BRICS might just put the dollar on a diet!

Trump pledges to make America a Bitcoin mining powerhouse

At the Bitcoin2024 Conference, Trump vowed to boost Bitcoin in the U.S., warning that a Kamala Harris presidency would "crush" investors. He accused Democrats of trying to "choke" businesses and promised to keep Bitcoin jobs in the U.S. with clear regulations.

Trump announced a "Bitcoin and crypto presidential advisory council" for regulatory clarity and vowed to stop the creation of a central bank digital currency. He humorously claimed the U.S. government's actions, not Bitcoin, threaten the dollar. Trump pledged to make America the "world's undisputed Bitcoin mining powerhouse" – no need to pack for China!

BUSINESS

Aditya Birla Group Bets Big on Bling and Paint

What happened

Aditya Birla Group has announced a grand entry into the jewellery business with ₹5,000 crore investment. Their new brand, Indriya, aims to shine bright in India’s ₹6.7-trillion jewellery market. Launching with four stores in Delhi, Indore, and Jaipur, they plan to expand to 11 cities within six months.

With around 15,000 curated pieces, including 5,000 exclusive designs, Indriya is all set to dazzle customers. This move follows their recent foray into the decorative paints market with the Birla Opus brand, targeting ₹10,000 crore in revenue within three years.

Why it matters

Aditya Birla Group's leap into the jewellery market is a strategic bet on India's booming consumer sector. With jewellery sales shifting from informal to formal sectors, trusted brands like Indriya have a golden opportunity.

The group aims to be among the top three national jewellery retailers in five years, projecting a 50% CAGR. Their consumer business, already contributing 20% to the group's revenue, is expected to soar to 25%, reaching $25 billion in five years. This diversification aligns with their successful ventures in lifestyle retail, financial services, and telecom.

Zoom out 

Aditya Birla Group is not just adding sparkle to its portfolio but betting big on the Indian consumer's love for gold and glitter. Competing with industry giants like Tata's Tanishq and Reliance Jewels, Indriya is set to carve a niche with its curated collections and rapid expansion.

With the paints business also in full swing, the group's consumer segment is poised for substantial growth. Stay tuned, as Indriya brings the bling and Birla Opus adds the colour!

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