Phone hub, Scania scandal, prelude to Matrix and other news
Business news and insights to jump start your day
“Ideas in secret die. They need light and air or they starve to death.”
- Seth Godin
Good morning! 😀
Here’s what we are looking at today:
India becoming a production hub for smartphones
Scania India scandal
Investors bet on the Metaverse with Roblox
Let’s get started…
📈 How did the markets fare
BSE Sensex - 51,279.51 | +0.50% ⬆
NSE Nifty - 15,0174.80 | +0.51% ⬆
10-Yr Bond Yield - 6.247% |+0.041 ⬆
S&P 500 - 3,939.34 | +1.04% ⬆
USD/INR - ₹ 72.90 | 0.00%
The initial public offering (IPO) of online ticket booking portal Easy Trip Planners was subscribed 160 times on the final day of bidding.
Anupam Rasayan, a specialty chemicals company, will launch its Rs 760-crore IPO today.
📰 What's happening around us
Tech
Apple enjoyed its best-ever quarter in India, shipping over 1.5 million iPhones during October-December 2020 as affordability catches up with desirability for a lot of Indians. With volumes rising, Apple has sped up the shift to local assembly for its phones in recent years and iPhone 12 is the latest product to be assembled in the country.
One model that seems unlikely to make local production however is the iPhone 12 mini whose local assembly plans appear to have been shelved. Although many complain about smartphones becoming increasingly unwieldy due to ever-expanding screen sizes, the petite smartphone seems to have very few takers and Apple is reportedly considering discontinuing the product.
While Apple continues to report record-breaking sales, compatriot Google has struggled to make meaningful inroads into the global smartphone market. But the company is not discouraged and is reportedly doubling down on the second-largest smartphone market with the successor to the Pixel 4a. The company is seeking a larger share of the action and is even considering shifting a portion of production of the device to India for both domestic and export needs.
India is quickly becoming a big production hub for global smartphone makers with Samsung, Xiaomi, Oppo, Vivo and OnePlus increasing their Indian production capacities in recent years. Thanks in no small part to the government’s Aatmanirbhar push.
Auto
The Volkswagen Group can’t seem to stay out of controversy. VW’s Swedish bus/truck brand Scania has investigated and discovered evidence that employees in India were involved in bribing local officials for bus contracts. Now, media reports have emerged that allege Scania paid bribes to win bus contracts in seven Indian states between 2013 and 2016. Scania is also alleged to have falsified vehicle documents and registration papers for 100 trucks in order to be able to sell them to a state-owned coal mining company in the country.
The Union Minister for Road Transport & Highways, Nitin Gadkari was also dragged into the controversy following reports by Swedish news agencies that alleged a luxury bus was delivered to a company linked to his sons in 2016 for use in his daughter’s wedding. The bus was allegedly gifted to Gadkari by the company with the intention of getting an assignment in India. The Minister was quick to deny the allegations and has now sent legal defamation notices to two European media houses - Sweden’s SVT and Germany’s ZDF.
A few years ago, Scania had shut down their bus division in India due to poor demand. But prior to closing down, the company had delivered 55 ethanol-run buses for a pilot project to the Nagpur Municipal Corporation. The buses were returned after the trial ended. According to the statement from the minister’s office, the buses were part of his efforts to bring in green public transport to India.
Tech
A prelude to the Matrix? Roblox exploded in popularity during the pandemic as young children, cut off physically from their friends, flocked to the gaming platform for social interaction. It hosted games, concerts, birthday parties and other activities. And now, investors are flocking to the stock of the game publisher as they bet on the Metaverse.
Roblox Corp, the publisher of the game, made its Wall Street debut on Wednesday with the stock closing up more than 50%. It’s now valued at $38 billion, worth more than some of the biggest games publishers including Take Two, Ubisoft and Electronic Arts.
Roblox is a virtual world that goes beyond gaming, which many call the Metaverse. Metaverse is a science fiction concept for a series of interconnected digital worlds where people hang out, play games, work and learn. If you’ve seen the movie Ready Player One, you’ll get the idea. It is the world’s largest user-generated games site wherein players can also build and share online worlds.
Technology has advanced so much in recent years that you can pretty much live your life without getting out of your house if you wanted to. And the pandemic has increased our comfort in doing just that. The way it’s headed, the coming generations will probably just live their life, plugged into a digital world won’t they?
🎯 News Bites
Planning to buy a new TV? You better get one quick as prices of LED TVs in India are set to rise from April as the cost of open-cell panels have gone up in the global markets by up to 35% in the past one month. Since open-cell panels constitute as much as 60% of the TV unit, prices of the commodity have a strong impact on the cost of the product.
Insuring your life is also set to get expensive. Life insurance companies are planning to increase term plan premiums by 10-15% from April, as they face higher-than-expected mortality claims due to Covid. However, the largest life insurer in the country LIC has decided not to increase term insurance rates.
Private equity firm KKR is looking to pick up a majority stake in Ahmedabad-based consumer products company Vini Cosmetics, which makes Fogg deodorants. The company is valued at Rs 8,500 crore.
In an effort to bring relief as well as boost the economy, President Joe Biden signed the $1.9 trillion stimulus bill into law, commemorating the one-year anniversary of the US lockdown over the coronavirus pandemic.
China seems to have censored the term 'stock market' from social media searches as China's CSI 300 index, which tracks the performance of the top stocks on the Shanghai and Shenzhen exchanges, fell to its lowest level in three months.
The iconic endurance racing event '24 Hours of Le Mans' will for the first time feature an Indian team, Racing Team India. The team features an all-Indian driver lineup of Narain Karthikeyan, Arjun Maini and Naveen Rao.
Bollywood actor Kartik Aaryan is on a roll. Footwear manufacturer Bata and Pepsi-owned snack brand Doritos have signed the young actor as brand ambassador. This is the first time Doritos has appointed a brand ambassador in India.
Weekend Recommendation
A short read on how a 22-year old entrepreneur multiplied his Rs 12.5 crore initial investment to a whopping Rs 2,000 crore in just 12 years.
That's it for this week. See you on Monday!
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