Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Markets were closed on account of Sri Guru Nanak Dev Jayanti.

TOP STORIES

Zepto Burns ₹300 Crore a Month 

What happened?

Zepto, the rising star of quick commerce, is burning through cash faster than you can order groceries.

• Its monthly burn rate jumped from ₹35-40 crore in May to a jaw-dropping ₹300 crore in October. 
  

This isn’t slowing down, with November likely seeing similar numbers. Yet, Zepto secured a ₹2,500 crore funding round from Indian investors, boosting its cash balance to $1.4 billion.

Why it matters

Zepto’s aggressive strategy is shaking up the quick-commerce market. The company is splurging ₹120 crore monthly on digital marketing, even outbidding rivals for Google and Meta keywords. 

Discounts are flying thick—iPhones at ₹4,500 off and wholesale deals through Super Saver are just the start. To keep up, Zepto is opening hundreds of stores each quarter while poaching talent with 50-60% pay hikes. CEO Aadit Palicha says most stores are profitable, with new ones showing even stronger EBITDA growth. 

Final words

Zepto’s bold game plan comes with risks. A burn rate of ₹300 crore per month could spook even the most daring investors. However, its record-breaking domestic funding round—featuring Motilal Oswal’s Raamdeo Agrawal and family offices like Bisleri and Mankind Pharma—shows faith in its model. 

Growing at 200% year-on-year, the company competes with rivals like Blinkit, BigBasket, and Swiggy Instamart to dominate the quick-commerce sector.

PAISON KA KHEL

Ritesh Agarwal bets big on Oyo with ₹550 crore investment

Ritesh Agarwal, the CEO of Oyo, is ramping up his stake in the company by investing a hefty ₹550 crore to buy more shares at ₹42.60 each, a 45% premium over his last purchase. This move boosts his shareholding from 30% to 32%.  

Oyo, which has recently posted strong profit growth, including a Q2 net profit of ₹ 158 crore, is expanding globally, partly through strategic acquisitions like G6 Hospitality.  

SBI to borrow $1.25 billion in largest loan of 2024

The State Bank of India (SBI) is set to raise $1.25 billion, marking the largest dollar loan by an Indian bank in 2024. The five-year loan will be used for corporate purposes at its Gujarat International Finance Tec-City (GIFT City) branch. 

This is a big move amid a 27% decline in India’s dollar loan volume this year.

TOP STORIES

Rubber Prices Push Tyre Prices Higher

What Happened

Tyre prices in India are likely to keep climbing, as manufacturers announce further hikes for the ongoing quarter. This comes as the price of natural rubber, a major raw material, continues to soar globally. 

• Rubber prices jumped from $1,600 per kg in Q1 to $2,000 per kg in Q2.
  

Plus, rising shipping costs and disrupted supply chains, partly due to bad weather in Southeast Asia, have further strained production. 

Why It Matters

The tyre industry is grappling with 6-8% higher raw material costs, impacting profit margins and forcing manufacturers like Ceat, Apollo, and JK Tyre to adjust their pricing strategies. 

• For instance, Ceat raised its prices by 3.5%-4% for passenger car tyres, and JK Tyre has already implemented a 3-3.5% increase.

The increasing cost of tyres is not just a problem for manufacturers but also for consumers, especially truck operators. Tyre costs have now become the third-largest expense after diesel and toll fees for truck owners. These rising prices are compounding the financial pressure on sectors reliant on road transport. 

Zoom out

The sharp hike in natural rubber prices, combined with delays in shipments from Southeast Asia, which now take up to 9 weeks instead of 3, has disrupted the entire supply chain. Local manufacturers were forced to source rubber from domestic markets at a premium, pushing prices to a 15-year high. This continued price surge is making it harder for businesses to manage costs while maintaining profitability.

GLOBAL NAZARA

McDonald's invests $100 million to recover from E. coli scare

McDonald's is shelling out $100 million to win back customers after an E. coli outbreak linked to onions on their Quarter Pounders. The outbreak, traced to a California supplier, affected over 100 people across several states, including Colorado (30 cases) and Montana (19). 

While the authorities have declared the outbreak over, McDonald's is offering $65 million in aid to the worst-hit franchises and has resumed serving Quarter Pounders with onions nationwide. 

Telangana makes EVs even more attractive

Starting November 18, 2023, the Telangana government has rolled out a policy that offers a 100% exemption from road tax and registration fees for electric vehicles (EVs) in the state. This two-year exemption, lasting until December 31, 2026, covers electric two-wheelers, four-wheelers, commercial vehicles, electric auto rickshaws, and buses.

Aimed at cleaning up Hyderabad’s air, the policy targets both private owners and businesses, including electric buses for Telangana's State Transport Corporation.

TOP STORIES

Adani Green Energy Targets $2 Billion Fundraise

What Happened

Adani Green Energy, India’s leading private renewable power company, is setting its sights on raising $2 billion in the coming months. The company plans to issue a $600 million bond soon, despite having cancelled a $1.2 billion bond issue last month due to investor concerns over rising geopolitical risks. 

Along with the bond issuance, the company is exploring private placement options for one of its subsidiaries. 

Why It Matters

This fundraiser is a crucial move for Adani Green, as it continues to scale up its operations. The company, which currently has an operational portfolio of 11.18 GW, aims to reach 50 GW by 2030. The bonds will finance projects like the massive 30 GW solar park in Khavda, which is expected to be the largest renewable energy park in the world.

Also, the company’s strong second-quarter financials, showing a 20% increase in revenue and a 39% rise in net profit, highlight its growing strength in the market. The funds will also help the company streamline its financing by converting short-term loans into longer-term bonds.

There’s more

Adani Green is also looking to expand its $3.4 billion construction finance framework to $5 billion to support its growing renewable energy portfolio. With $600 million in bonds on the horizon and private placements in the works, the company is clearly committed to achieving its 50 GW target by 2030. 

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