Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: On Tuesday, May 14, 2024, the Sensex rose by 328 points to reach 73,104, while the Nifty surged by 113 points to reach 22,217. Notably, Nifty Bank jumped by 105 points and Nifty Midcap soared by 489 points with strong gains witnessed in the automobile and energy sectors. Top gainers of the day included M&M, L&T, JSW Steel, and IndusInd Bank.

BUSINESS

Haldiram's Billion-Dollar Saga with Global Investors

What happened

Haldiram's, a household name in India, has attracted the attention of global investors. Private equity firms like Blackstone, along with Abu Dhabi Investment Authority and GIC of Singapore, are eyeing a controlling stake in Haldiram Snacks Food Pvt Ltd (HSFPL). This move could mark one of the largest private equity deals in India, valuing Haldiram's at a significant $8-8.5 billion.

Why it matters

The interest of major private equity players underscores Haldiram's strong market position and growth potential. This potential deal signifies not only the value of Haldiram's as a brand but also the attractiveness of India's food and snack industry to global investors. 

• Haldiram’s combined snacks business is expected to generate ₹14,500 crore in revenue for FY24, with an EBITDA of ₹2,300-2,500 crore. 
  
  

• The business has seen an annual revenue growth rate of 18% over the past five years. Usually, the EBITDA margin is 14-15%, but it increased to 17-18% last year due to lower commodity prices and price hikes in FY23.
  

The proposed investment could fuel Haldiram's expansion plans, enhance its product offerings, and strengthen its market presence globally. It also highlights the ongoing trend of Indian businesses attracting significant investment interest from international players, showcasing India's potential as a key market for strategic investments.

Zoom out

Haldiram's transformation from a family-run business in Bikaner to a major target for private equity deals highlights the remarkable growth opportunities in India's food industry.

From its humble beginnings in 1937 with a simple bhujia recipe, Haldiram's has evolved into India's largest snack and convenience foods company, becoming a multi-billion-dollar empire. By making traditional snacks easily accessible in plastic packs, Haldiram's has successfully catered to the diverse tastes of consumers, cementing its place as a dominant player in the market.

BIG MONEY MOVES

Macrotech Developers to invest heavily in land acquisition

Macrotech Developers Ltd, known for its Lodha brand, plans to invest ₹3,500-4,000 crore this fiscal year to acquire land parcels. This investment will support their expansion into new housing projects to meet the rising demand for residential properties. The company aims for a 60:40 split between owned land and joint development agreement(JDAs), with a goal of delivering 10,000 apartments this year.

Last fiscal, Macrotech recorded a 20% increase in sales bookings to ₹14,520 crore and plans to launch 17 new projects this year, projecting a 21% growth in bookings to ₹17,500 crore.

ChrysCapital injects $100 million into Centre for Sight 

ChrysCapital, an Indian private equity firm, will invest $100 million in the New Delhi-based eyecare chain Centre for Sight. This deal includes buying the entire stake held by Mahindra Holdings Ltd. Centre for Sight plans to use the funds to accelerate its expansion, aiming to grow from its current 83 centres nationwide.

This investment highlights the increasing interest in single-specialty healthcare providers, with India’s eyecare industry receiving over $1.05 billion in investments recently. Founded in 1996, the Centre for Sight treats over 1.5 million patients annually, primarily in North India.

BUSINESS

Quick Commerce Propels FMCG E-commerce Sales to New Heights

What happened

In FY24, quick commerce significantly boosted online sales for major FMCG companies like Hindustan Unilever, Dabur, Adani Wilmar, and Parle Products. Quick commerce's share in overall e-commerce sales nearly doubled to 35%, up from 15-18% in FY23. This rapid growth has led to increased interest and activity from various companies, including Walmart-backed Flipkart, which is planning to enter the quick commerce market.

Why it matters

This surge in quick commerce reflects a shift in consumer behaviour towards faster and more convenient shopping options. Parle Products' VP, Mayank Shah, noted the surprising speed of this change and the willingness of consumers to pay extra for convenience.

FMCG companies like Tata Consumer Products, Nestlé, and Dabur are witnessing a significant shift in sales dynamics, with e-commerce emerging as a key growth driver. 

• Tata Consumer's e-commerce sales surged by 35%, outpacing modern trade's 9% growth.
  
  

• Nestlé reported a fivefold increase in e-commerce contribution, reaching 6.8% of domestic sales. 
  
  

• Dabur's quick commerce segment now forms 30% of their e-commerce, showcasing the sector's rapid evolution.
  
  

Companies like Zepto, Swiggy, Blinkit, and BB Now are expanding into new markets, driven by this demand. This trend is significantly impacting FMCG companies, with e-commerce sales growing at a rate two to three times faster than modern trade, highlighting its substantial influence on the industry.

Zoom out

The rise of quick commerce has transformed the FMCG e-commerce landscape, making fast, convenient shopping a norm for many consumers. With major players like Zomato's Blinkit aiming to expand their dark store networks and others like Tata Consumer Products seeing substantial growth in e-commerce sales, it's clear that quick commerce is here to stay.

BIG PICTURE

🇺🇸 Biden escalates US tariffs on Chinese goods, including EV and chips

President Joe Biden has announced a substantial increase in tariffs on various Chinese imports, targeting items such as electric vehicles, computer chips, and medical products. This move is aimed at addressing what the White House perceives as unfair trade practices, aiming to bolster U.S. economic security. The tariff hikes affect $18 billion worth of Chinese goods, including steel, semiconductors, batteries, critical minerals, solar cells, and cranes.

📺️ Prasar Bharati plans 'clean' OTT platform to counter vulgar content

Prasar Bharati, India's public broadcaster, is gearing up to launch its own over-the-top (OTT) platform in August to provide family-friendly content amidst concerns about vulgar and abusive programmes on private platforms like Netflix and Hotstar. The platform aims to promote India's culture and values, offering both clean entertainment and programs covering current affairs. 

The upcoming OTT platform launch by Prasar Bharati coincides with the government's crackdown on objectionable content, with 18 platforms already blocked in March 2024 for publishing "vulgar and obscene" material under the Information Technology Act, 2000.

BUSINESS

India's Diesel Exports to Europe Hit by US and Gulf Rivals

What happened

India's diesel exports to Europe took a significant hit in April, dropping by 20% due to rising competition from the US and Gulf suppliers. Shipments fell from 262,000 barrels per day (bpd) in March to just 210,000 bpd in April. This dip is attributed to weakened demand in Europe and healthier exports from the Middle East and the US, which have made it tougher for Indian diesel to compete.

Overall, India's diesel exports also saw a decline of 9%, falling from 567,000 bpd in March to 517,000 bpd in April.

Why it matters

Europe has been a major consumer, gulping down over 40% of India's diesel exports. However, due to the Ukrainian conflict and efforts to replace Russian diesel, European markets have opened up to other suppliers. Indian refiners, who usually benefit from such shifts, are now facing stiff competition.

The added challenge comes from the longer and costlier shipping routes via the Cape of Good Hope, taken to avoid the Red Sea due to potential Houthi rebel attacks. This not only inflates transportation costs but also reduces the competitiveness of Indian diesel in Europe. Meanwhile, Asia has shown an increase in diesel imports from India, rising by 33% from 52,000 bpd in March to 69,000 bpd in April, providing some relief to Indian refiners.

Zoom out

Indian diesel exports are navigating choppy waters. With Europe tightening its belt and opting for alternatives from the US and Gulf, Indian refiners like Reliance Industries and Nayara Energy are feeling the squeeze. 

However, despite a decline in global prices, Indian refiners managed to generate significant revenues of $29 billion in 2022-23, although this fell to $22 billion in 2023-24. This highlights the need for Indian refiners to diversify their export markets and adapt to evolving global energy preferences.

MIRCH MASALA

🔐 Secret door in Super Mario 64 finally unlocked after 28 years
⚠️ Finance minister cautions on 'unchecked explosion' in F&O trading
❓️ Viral video alert: Diesel-infused paratha - what's the story?
🏏 Top players with the most Man of the Match awards in T20 World Cup history
🛩️ Flat-Earth Society comes up with an intriguing question on aeroplanes and their speed