Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Markets showed a strong recovery on June 5, with the Nifty closing above 22,600 and the Sensex gaining over 2,300 points. This surge was driven primarily by gains in auto and metal stocks.

BUSINESS

boAt's Affordable Strategy Backfires: Market Share Drops Amid Rising Competition

What happened

boAt, once the champion of affordable smartwatches and audio devices in India, is seeing its market share slide. From nearly 19% in 2022, boAt's share in the smartwatch market fell to 14% in 2023, overtaken by Fire Boltt and Noise. With rivals like Tata Group’s Titan and Pristyn Care’s BeatXP entering the fray, boAt is reassessing its strategy to stay afloat.

Why it matters

boAt’s strategy of making smartwatches accessible at prices as low as ₹999 has ironically led to its market share decline. The average selling price in this segment has dropped by 68-70% over the past two years, creating a tough environment for profitability.

Founded in 2016, boAt rode the wave of affordable tech, attracting marquee investors like Warburg Pincus and Qualcomm Ventures, and raising over $170 million. However, with the market flooded by competitors, boAt now needs to pivot. The company is banking on its strong audio product line, which makes up 80% of its revenue, and plans to ramp up premium offerings and local manufacturing to regain momentum.

Zoom out

As boAt navigates the competitive landscape, it plans to differentiate through innovation in its smartwatch line and elevate its average selling prices across products. The company’s focus is shifting to premium audio devices and increasing local manufacturing, with a goal of having 70% of its products made in India.

Despite recording its first-ever annual loss of ₹130 crore in FY23, boAt remains optimistic about its "Make in India" initiative and future product launches. The move to higher-priced, feature-rich devices could help boAt regain its footing and continue to compete in the crowded tech market.

BIG MONEY MOVES

Maruti Suzuki to invest ₹450 crore in renewable energy

Maruti Suzuki India announced a ₹450 crore investment in renewable energy projects, including solar power and biogas, over the next three years. The company has started producing biogas at its Manesar facility using food waste and Napier grass. This initiative aligns with the Ministry of New and Renewable Energy’s 'Waste to Energy' program. In 2023-24, Maruti Suzuki invested ₹120.8 crore in renewable energy.

Mutual funds lose ₹90,000 crore in PSU stocks

Mutual funds in India saw a dramatic ₹90,000 crore drop in the value of their public sector unit (PSU) holdings following unexpected election results. As of June 3, mutual funds held shares worth ₹5.71 lakh crore in 84 state-run firms, which plummeted to ₹4.83 lakh crore by June 4. The total market capitalisation of Indian PSUs dropped nearly ₹10 lakh crore, hitting a six-month low of 13.1% of the total market cap.

BUSINESS

Food Delivery and E-commerce Giants Team Up to Protect Delivery Partners

What happened

In response to the scorching heatwave gripping many parts of India, food delivery and e-commerce giants have joined forces to protect their delivery partners.

Zomato has led the charge by setting up 450 rest points nationwide, offering comforts like seating, free water, mobile charging, and clean washrooms, open to all delivery personnel irrespective of their company. They've also secured over 5 lakh units of refreshments and medical supplies for distribution at these locations across 250 cities.

Additionally, Zomato has deployed measures like 15-minute ambulance services and round-the-clock emergency support in over 530 cities. They've even introduced special dry-fit t-shirts to help their partners cope with the rising temperatures.

Not to be outdone, Swiggy Instamart boasts over 900 recharge zones with similar amenities, ensuring the well-being of delivery staff across the industry. Blinkit, a Zomato subsidiary, has integrated SOS support into its app and is installing air coolers in store waiting areas.

Why it matters

The proactive approach of these platforms highlights a growing concern for the welfare of delivery partners, acknowledging the challenges they face in extreme weather. By providing essential amenities, medical support, and insurance coverage, companies like Zomato, Swiggy, and Blinkit are not only fostering a safer working environment but also showing a commitment to employee well-being.

This collaborative effort sets a positive precedent in the gig economy, emphasising the importance of valuing and safeguarding the workforce, especially during challenging conditions like heat waves.

Zoom out

As temperatures soar, the partnership between food delivery and e-commerce giants to protect their delivery partners reflects a commendable step towards employee welfare. The establishment of rest points, provision of essential supplies, and integration of emergency services demonstrate a proactive approach to addressing the impact of extreme weather on frontline workers.

BIG PICTURE

Dutch Government may spend €3 billion to clean up Tata Steel plant

The Netherlands is considering up to €3 billion in subsidies for Tata Steel's IJmuiden factory to address severe health and environmental issues. This decision follows the Dutch parliament's approval of funds for the renovation. The factory, a major employer, has faced criticism for emissions linked to elevated lung cancer rates and reduced life expectancy in the area.

Hindalco shares dip 6% as Novelis postpones IPO

Hindalco Industries' share price plummeted nearly 6% to ₹608.40 on Wednesday after its US subsidiary, Novelis Inc, postponed its IPO due to market conditions. The IPO price band was set at $18 to $21 per share, aiming to raise between $810 million and $945 million. 

Novelis, a major aluminium recycler, planned to offload 45 million shares through its sole shareholder, AV Minerals. Despite the postponement, Hindalco retains a 92.50% stake in Novelis, targeting a $12.6 billion valuation.

BUSINESS

Kotak Bank Gets RBI Nod to Sell 70% Stake in Insurance Arm to Zurich Insurance

What happened

Kotak Mahindra Bank has secured approval from the Reserve Bank of India (RBI) to sell a 70% stake in its general insurance subsidiary to Zurich Insurance Company. This move follows Zurich's announcement last November to initially acquire a 51% stake in Kotak Mahindra General Insurance through a blend of capital infusion and share purchase. Zurich has committed to purchasing an additional 19% stake within three years, bringing the total investment to a hefty ₹5,560 crore.

Why it matters

This deal marks a significant shift in the Indian insurance landscape. For one, it underscores the growing interest of foreign insurers in the Indian market, a sector that's ripe for expansion. Zurich Insurance, a heavyweight operating in over 200 countries, sees immense potential in India, and this acquisition is a testament to their confidence.

The infusion of funds and expertise from Zurich could give Kotak Mahindra General Insurance a robust boost, enhancing its market position and competitive edge. Plus, it's a great financial win for Kotak Mahindra Bank, as the sale has already positively impacted its stock, with shares closing up 4.89% at ₹1,718.75 on the BSE.

Zoom out

With Zurich's global experience and substantial investment, Kotak Mahindra General Insurance is set to scale new heights. This deal not only strengthens Kotak Mahindra Bank's financial position but also brings fresh international expertise to the Indian insurance market. It's a win-win situation, promising exciting developments in the coming years.

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