Ola’s electric dreams, home loan rate war, ultra-rich tax and other news
Business news and insights to jump start your day
“Opportunities don’t happen, you create them.”
- Chris Grosser
Good morning! 😀
Welcome back! We’re starting the week with:
Ola wants to be a Tesla
Home loan rate war
Saudi looking to lead the green hydrogen revolution
📈 How did the markets fare
BSE Sensex - 50,405.32 | -0.87% ⬇
NSE Nifty - 14,938.10 | -0.95% ⬇
10-Yr Bond Yield - 6.232% | +0.020 ⬆
S&P 500 - 3,841.94 | +1.95% ⬆
USD/INR - ₹ 72.83 | +017% ⬆
The initial public offer of MTAR Technologies, a Hyderabad-based engineering firm that has aided India in its space exploration missions, was subscribed 200 times on Friday (final day of subscription).
Joining the IPO rush is Easy Trip Planners, the parent company of easemytrip.com. The Rs 510 crore initial public offer will kick-off today.
📰 What's happening around us
Auto
India’s answer to Tesla? Ola’s Bhavish Aggarwal is making moves and fast to transform Ola from a ride-hailing company to an electric vehicle manufacturer. If all goes according to plan, Ola Electric hopes to make 10 million vehicles annually from the Ola FutureFactory in Tamil Nadu, the largest two-wheeler plant in the world.
The factory coming up on 500-acres will be built at an investment of Rs 2,400 crores and will have more than 3,000 robots working alongside 10,000 workers. Phase one is expected to be completed this year with the first e-scooters rolling out by June 2021. To keep costs in check, Ola is designing, engineering and manufacturing its own battery pack, motor, vehicle computer and software.
The billion-dollar Ola Electric will need to fend off competition from local rivals Hero MotoCorp, Bajaj Auto, Ather Energy and even Chinese brands like Niu Technologies. Eventually, the company plans to spread its wings to enter the three-wheeler and four-wheeler segments.
Banking
If you’re considering buying your first home, now might be the best time as banks, flush with liquidity, are cutting interest rates to decade lows in order to attract customers. Lower property prices due to the pandemic and stamp duty reduction in some states could also sweeten the proposition.
ICICI Bank is the latest one to get in on the act, cutting interest rates to 6.70% for loans up to Rs 75 lakh and 6.75% for loans above that figure. SBI which controls a third of the home loan market also cut rates to 6.70%. Kotak Mahindra Bank is claiming to offer the lowest rate in the market – 6.65%. But while these offers are for a limited period till March 31, HDFC which cut interest rate to 6.75% has not specified it is a limited period offer.
One thing to be mindful of however is that these loan rates are linked to the repo rate, the benchmark interest rate in the country set by the Reserve Bank of India. So while customers will be able to avail home loans at the cheapest rate in a decade, if the repo rate is hiked, the interest rate on home loans will also follow. And there is a general consensus that the repo rate has bottomed out.
International
With the shift away from hydrocarbons accelerating across the world, there is a fuel that is increasingly gaining promise as an alternative – green hydrogen. And Saudi Arabia, the world’s biggest crude exporter, is looking to future-proof the kingdom’s revenues by becoming one of the leading green hydrogen makers in the world.
Hydrogen is a clean fuel when consumed, emits only water. And when produced using renewable energy sources such as wind and solar power, it is known as green hydrogen. The biggest thing going for the fuel is that it is capable of cleaning up the difficult-to-decarbonise sectors of the economy such as steel manufacturing, aviation, shipping etc.
But, the technology used for producing hydrogen – sending electric current through water to split the “H2” from the “O” – remains very expensive. Also there are concerns about its storage and transportation (since its highly flammable) and the hugely water-intensive nature of its production.
However with a net-zero carbon goal to be met by 2050, more nations and companies are pouring resources into developing hydrogen technology. The European Union, UK, China, Australia are all making moves but Saudi Arabia is looking to take the lead, building a $5 billion green hydrogen plant in the megacity of Neom by 2025.
🎯 News Bites
Petrol prices have remained unchanged across metros for eight straight days (because of elections?) but it’s unlikely to hold much longer after global crude prices surged following an attack on key Saudi oil sites. The global benchmark Brent crude has risen 36% since the turn of the year.
There’s good news for people looking to get rid of their old car and buy a new one. Union minister Nitin Gadkari revealed that under the new Vehicle Scrapping Policy, automakers will give around 5% discount on the new car.
Reliance is getting on the social media train. Nita Ambani who is the chairperson and founder of Reliance Foundation announced the launch of a digital networking platform for women called 'Her Circle'. It will initially be launched in India and later made available globally.
The US government is planning to tax its ultra-rich to help reduce the wealth inequality in the US. Under the proposed Ultra-Millionaire Tax Act, the annual tax would be a 2% levy on Americans with a wealth of more than $50 million and 3% on a wealth of over $1 billion. This means the world’s richest men Jeff Bezos and Elon Musk would owe $5.7 billion and $4.6 billion in taxes for 2020 respectively.
In an aggressive hacking campaign allegedly sponsored by the Chinese government, Microsoft email service of businesses and government agencies in the US were compromised.
Malaysia’s budget airline group, Air Asia is aiming to get into the e-hailing service with the launch of a flying taxi business as early as next year.
That's it from us. Have a great day and a productive week ahead!