What Else

The Synopsis "It has always been our desire to develop a world-class bank," declared Anil Ambani, chairman of the Reliance Group, in 2010. In November 2021, India's banking regulator, the Reserve Bank of India (RBI), has seized control of Reliance Capital, the group's non-banking financing arm, and has submitted it to the bankruptcy courts. Even the non-banking component of the company could not survive. But how did Reliance Capital find itself in such a precarious position? The narrative starts in 2005, when the Ambani brothers decided to separate the family firm. Anil Ambani took over the telecom and financial services businesses. He was banking on what he saw to be India's "future." But just getting a foot in the door isn't enough; you also need to know how to operate it effectively. And, well, let's just say the execution wasn't quite flawless. Anil Ambani continued to make greater and bolder (maybe riskier?) ventures in the entertainment...

The Synopsis Sirens are presumably familiar to everyone who has read Greek mythology. The melodies of these mythological half-bird, half-woman creatures enticed mariners. If the sailors couldn't resist the Siren's singing, they'd fall into a trap and crash their ship onto the rocks. The Argonauts, a group of Greek heroes, devised a solution. They brought Orpheus, a musician, along on one of their journeys. How did it assist you? Orpheus, on the other hand, played loud music on his lyre, drowning out the Sirens' songs. The sailors were preoccupied. The Sirens did not seduce them, and the ship arrived in safe harbour. What's this, we're talking about Greek mythology? There's a reason behind that. Consider the Siren song to be the new pair of shoes you've been admiring, or a brand new phone...anything that tempts you to spend your hard-earned cash. You'll need a weapon like Orpheus' to battle that temptation. That is a reasonable budget for you. And...

The Synopsis "The movie industry is... a business of the unusual," argues Arthur De Vany in his book "Hollywood Economics." It is controlled by a small number of outstanding films and performers who account for practically all of the industry's earnings and influence." As a result, the majority of manufacturers end up with a portfolio full of duds. They spend millions of dollars on a film just to watch it fail at the box office. And this isn't a one-time occurrence. Instead, it's the standard. Needless to say, film funding is a risky business. However, one film producer now wants to add to the excitement by crowdsourcing the financial portion. And he plans to achieve it via Non-Fungible Tokens, or NFTs. Let's start by breaking this out. What does it mean to have a non-fungible token? Especially the phrase fungible in the middle. Take a look at it this way. If you had a Rs 10 note, you may trade it for another Rs 10 note and the difference would ...

Today, we can understand why companies like Tata and Reliance won't be able to float banks in the near future. The Synopsis We wrote a few days ago on how central banks must be allowed to operate freely. We wrote — in it. "Central banks serve as diligent guards in healthy democracies. Guardians with extensive economic knowledge and wisdom who can help a nation through turbulent seas. They've been taught to be patient and think about what's going on in real time. They are open and typically encourage constructive discussion and disagreement. And there's the issue of public responsibility. To avert an economic disaster, all of these characteristics are required." And nothing better illustrates this idea than what occurred this week. After almost a year of study and debate, the RBI (our own attentive watchdog) decided against providing full-fledged banking licences to deeply established corporate companies or industrial houses (think Reliance or Tatas). For the u...

Reuters reported a few days ago that Visa had filed a protest with the US authorities accusing India of giving its native payment network RuPay excessive favouritism. We also explain why Visa has ants in its trousers. The Synopsis Before we get started, here's a quick rundown of how credit card transactions operate. Assume you go to the supermarket and purchase a package of biscuits. You don't have any money with you. So you opt to pay for it using your debit/credit card. When you swipe your card at a point-of-sale machine, a wonderful dance starts. In an effort to relocate money, your bank contacts the shop owner's bank. The merchant discount rate is a minor fee charged by the business owner's bank for being a willing participant. It can't, however, keep everything to itself. It must divide a portion of the profits with another middleman who assists in the payment process. Visa or Mastercard are the intermediaries in this case. And, since the business owner has gai...

Today, we can understand why tomato prices are skyrocketing. The Synopsis We discussed the Turkish currency and the country's spiralling inflation, which is causing an economic disaster. We ascribed the majority of it to Turkish President Recep Tayyip Erdogan's paradoxical economic policies. More particularly, his belief that you might reduce inflation by making low-cost loans available to firms and individuals. This sparked a flurry of inquiries from our readers, who wondered whether this low-cost lending company was causing inflation in India. They're concerned about tomatoes, in part. If you haven't heard, the price of tomatoes has risen dramatically. Yours sincerely just purchased tomatoes for Rs 60/kg from a supermarket in Bangalore. You could think that's not that horrible. However, only a few days ago, some individuals were paying over Rs 100 per kilogramme for tomatoes. It's insane, and you have to wonder at this point whether tomato inflation is a resul...

Today, we can see how nations such as the United States and India want to combat the oil cartel. The Synopsis The facts are straightforward. High gasoline prices are causing widespread public outrage throughout the globe. And when this type of dissatisfaction simmers for a long time, it typically reflects adversely on incumbent leaders' popularity. It makes no difference who you are. You don't want to put people's patience to the test for too long. As a result, something has to give. Alternatively, someone. And that someone is the Organization of Petroleum Exporting Countries (OPEC). For months, the infamous oil cartel — made up mostly of Middle Eastern oil-producing nations — has refused to raise oil supplies. Granted, there was a period last year when there was an abundance of supplies. However, with the post-pandemic rebound, oil consumption is surging. We're aware of it. They are well aware of this. Everyone is aware of it. They should ideally be coming in and rampi...

Companies have been attempting to break into the Indian breakfast industry since the 1990s, but have had little success. However, there has been a resurgence of interest in the category in recent years. Today, we'll look at why corporations are redoubling their efforts and see whether there's any value in entering this tricky sector. The Synopsis What do you consider to be the most important meal of the day? Breakfast? Yes, we concur. Breakfast is in charge. However, history shows that breakfast wasn't always the most important meal. Breakfast, on the other hand, is a relatively recent phenomenon. A morning meal was considered a sin in many areas of the globe until the 1500s. People only ate two meals a day, one in the middle of the day and another in the evening. But then came the industrial revolution, which drastically altered everything. Meal patterns evolved in tandem with the widespread adoption of 9–5 workdays. Breakfast had become a must. It was even considered cool...

The Synopsis A quick primer on "term life insurance" before we get to the meat of the tale. Most people now conceive of these as financial products that also happen to provide insurance advantages, such as ULIPs and Endowment plans. They'll invest some money over the course of 5 or 10 years, and when the insurance matures, they'll receive the invested corpus back — along with some more cash. They'll also be expecting a substantial lump sum payment to their nominees if they pass away during this time. In conclusion, there is a prevalent misperception that all life insurance contracts have investing rewards in addition to life protection. Term insurance plans, on the other hand, do not function in this manner. There isn't much to invest in here. You pay your premiums over a 30- to 40-year period and will never receive a dime during that time. The only thing you may expect to see is life insurance, which means that if you die, heaven forbid, your dependents would...

The Synopsis General Electric (GE) announced a few weeks ago that it will break its company into three independent publicly traded entities. The three new businesses will now concentrate on three distinct business lines: aviation, healthcare, and energy. Jet engines will be manufactured by a single business, which will be a behemoth in and of itself. The second will concentrate on healthcare, especially the production of life-saving medical equipment. Finally, the third firm, GE's bread and butter, will continue to light up the power market. These progeny are intended to function independently within a few years, with their own management teams and boards of directors. And, if all goes as planned, one of America's biggest and most valuable public companies will cease to exist as a conglomerate in a few years. But here's the thing: it's a trend that we're seeing all over the place . Johnson & Johnson (JNJ) followed GE's lead and announced its separation only ...

Telecom rates have begun to rise after two years. Is it, however, sufficient to prevent the sector from becoming a virtual oligopoly? The Synopsis Reliance Communications unleashed a bombshell in the telecom market in 2015. They reduced rates, gave low-cost data plans, and completely changed the ecology. Thousands of people queued overnight to change their cellular provider. Jio, on the other hand, became a darling of the investment community. It's a strategy that many well-funded firms have employed in the past. To begin, entice buyers with low prices. Then, with your vast funds, knock out the competitors cold. You may then boost charges after you have the consumers locked in. And, if all goes well, consumers will be forced to accept the status quo because they will have no other option. Bharti Airtel and Viacom were among the private incumbents hit by Jio's blitzkrieg (formerly Vodafone Idea). Vi was on the verge of collapsing, while Airtel was on firmer foundation. Its stock...

One business in particular made a splash in what was the greatest week for Indian startups in almost a decade: Sigachi Industries. And in today's issue, we find out why investors are so enthusiastic about the firm. The Synopsis What is the purpose of Sigachi Industries? That was the major question last week, when PolicyBazaar and PayTM raised billions of dollars. Because Sigachi surpassed everyone on the block when it struck Dalal Street with a tremendous listing gain of 252.7 percent, while bringing home just $17 million during its IPO. To put it another way, if you had been assigned Sigachi shares during the IPO, your investment might have more than quadrupled. In fact, it closed the day 270 percent higher than the initial public offering price of Rs 163. It had the second-best initial public offering (IPO) debut ever. Isn't it incredible? However, we must once again face the elephant in the room. What exactly does the business do? In India, Sigachi is the major maker of MCC ...

This paint business, which was once a stock market favourite, hasn't had a fantastic year. While the Sensex has increased by more than 50%, Asian Paints has only increased by 30%. The Synopsis Asian Paints, the world's largest paint manufacturer, has raised prices by just 3% a year for the past 20 years. That's correct, despite the fact that we've had to cope with out-of-control inflation everywhere, paint costs have never been an issue. The corporation, on the other hand, has finally rolled up its sleeves and is getting down to work. Asian Paints, the industry leader, is raising prices by 7–10 percent starting November 12th. Yes, it's advising everyone to spruce up their homes before Diwali. But, you may wonder, why the abrupt change of heart. Of sure, earnings are important. Sales increased by 32% year over year, from Rs 5,350 crores to almost Rs 7,000 crores, according to the company's latest figures (July-September). However, its net income dropped by 28%, f...

The Synopsis "When America sneezes, the world gets a cold," as the saying goes. Well, it's a term that gives you a sense of the US's worldwide influence— the impacts of globalisation and all that. However, India has its own version of the quote: "When America sneezes, India develops a cold." India develops a fever when Europe sneezes beside it." It's also a nice way to characterise the Indian IT sector. Because we owe approximately 70% of our exports to two regions: the United States and Europe. As a result, when these areas experience a slump, Indian IT suffers as well. When Covid-19 hit last year, for example, IT investors were on pins and needles. Why? Because the previous global recession, which occurred in 2008, was not nice to anybody in the business. Before the financial crisis, IT businesses' revenues were increasing at a rate of 30% each year. Soon later, it plummeted to 15%. Companies all throughout the world were forced to slash costs...