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19th March 2021
Good Morning! 

Happy Friyayy!!
We know what our plans are for this weekend. We are going to be watching the Snyder cut of the Justice League. With the movie running for more than 4 hours, it may actually end up taking a few sittings to watch it.
Have any of you seen it already?
  MARKETS
 

SENSEX

49,216.52

- 1.17%

NIFTY

14,557.85

- 1.11%

US$

72.53

- 0.02%

GOLD

44,831

+ 0.02%

10-YR

6.20%

+ 1.7 bps

OIL

4,640

- 0.51%

*As of market close

  • Markets: Another spike in US bond yields spooked stock markets worldwide. Here in India, the headline indexes sold off for the 5th day in a row, with the decline being led by IT and financial sector stocks.

Corporate

The Future is Uncertain
Girl shrugging shoulders

There have been more twists in the whole Amazon-Reliance-Future saga than probably even Andhadhun.
Now we've got another twist.

The Delhi High Court has upheld the Singapore Emergency Arbitrator's order which means the Future Retail and Reliance deal is now on hold.

Quick Recap

Just in case you guys forgot here is a quick recap.
The Future group had a ton of debt and wasn't able to run the company any longer.
Mukesh Bhai came to their rescue.
And Reliance agreed to buy Future Retail in August 2020.

Then comes the first twist in the story.
Amazon literally came in and said ye shaadi nahi ho sakhti.

Amazon was supposed to have the first right to acquire Future Retail.
They weren't just making stuff up. Amazon claimed they got the rights as a part of their deal with Future Coupons (another Future Group company) which happened in 2019.

Singapore Intervenes

Things first reached Singapore. With the Singapore International Arbitration Centre (SIAC) saying Future Group actually breached the contract. Amazon actually had the right of first refusal. So the deal had to be put on hold.

But Reliance and Future were like this isn't Singapore. Your orders aren't valid here man.

Enter Indian Courts

Amazon filed a petition in the Delhi High Court saying rules are rules and that you got to follow what the SIAC has said.
But the Delhi High Court was a bit unsure at that time.
They basically talked about how Amazon cannot use an agreement with one Future group company i.e. Future Coupon to exert control over a deal struck by another company i.e. Future Retail
So the deal was on at that time.

Amazon then went to the Supreme Court.
The Supreme Court stopped regulatory approval for the deal and ordered the NCLT to not sanction the scheme.

Phew, Back to the present

Now the Delhi High Court has changed its track.
As per them, the Future Group knew what they were doing and willingly violated the SIAC's orders. Now that is wrong in their opinion(obviously)

So here is what they want:

  • CEO Kishore Biyani and others have been asked to explain why they should not be detained for 3 months.
  • The court has also ordered assets of Future Retail, Future Coupons, Kishore Biyani and others to be attached and has given them 30 days to file details of all their assets.
  • The company and its directors have been asked to deposit Rs 20 lakh in the Prime Minister's Relief Fund. Please don't ask us why.

The next date of hearing is April 28th. Let us hope all the twists are over.

Auto

Buy A New Car!


Homer Simpson Driving

The government has a couple of plans to discourage the use of old cars in India. And they’re planning to use the methods they know best – tax increases and tax incentives.

To discourage older cars, the gov will require users to re-register vehicles once they are 15 years old.
And the re-registration fee will be quite hefty.

On the other end, to promote new cars which are more environment-friendly, a road tax rebate for both personal and commercial vehicles is being worked out.

The Situation

Apparently, there are 51 lakh light motor vehicles that are older than 20 years, and 34 lakh vehicles older than 15 years.
Around 17 lakh medium and heavy commercial vehicles are older than 15 years and don’t have a valid fitness certificate.

The Plan

The government plans to lead by example here.
The scrapping will be kickstarted with government vehicles first – all older than 15 years will be scrapped once the policy comes into effect on October 1st.
Also, for those who don’t want to scrap their vehicles, the re-registration fee they’ll have to pay has been hiked to 8x of what it used to be. (For personal cars it will be Rs 4,000 vs Rs 500 earlier.)

The Impact

Apart from reducing air pollution, this new policy is likely to require Rs 10,000 crores of investments and will create 35,000 jobs too. 
The expected increase in the sale of new vehicles should boost gov GST collections by Rs 30-40k crores.
It sure sounds like a win-win. But we’ll have to wait and see how people react once its implemented.
 

Tech

D2C Booming
Boom
 

D2C definitely seems to be the in thing this month. Some would say it has been for the past few years.

Glamm Funding

The Direct to Consumer(D2C) beauty brand MyGlamm has raised Rs 175 crore.
Post this round they claim to be valued at $100 million.

MyGlamm offers a wide range of products across makeup, skincare and personal care.
They sell this both online and offline. So online they sell on their own website as well as sites like Amazon, Nykaa.
Their offline reach is pretty good too. With them having a reach of 10,000 offline point of sales across 70 cities in India.

The interesting thing about this round is that Amazon is one of their investors in this round.

Amazon hasn't invested in any D2C brand in India so far, so clearly they are liking all the data they're seeing coming in from MyGlamm's sales.

More Tshirts

Bewakoof the D2C fashion brand has raised around Rs 30 cr too.

Bewakoof makes those quirky Tshirts you see people wearing.
A huge chunk of Bewakoof’s customer base includes millennials across tier I, II and III cities.

They've struck quite a chord with revenues of over Rs 200 cr in FY20.
In fact, they'd probably be one of the only D2C fashion brands that do more than Rs 200 cr in revenue.

The Takeaway

There are plenty of D2C startups that are really growing their revenue and overall reach. We are excited to see the next stage of their growth now.

Foreign Tour ✈️
 

US Monetary Policy
The Federal Reserve has sharply ramped up its expectations for economic growth but indicated that there are no interest rate hikes likely through 2023.

They now expect 6.5% GDP growth in 2021 (vs 4.2% earlier) and expect unemployment to fall to 4.5%

As widely expected, the policymaking Federal Open Market Committee also voted to keep short-term borrowing rates steady near zero, while continuing an asset purchase program in which the central bank buys at least $120 billion of bonds a month.

Read more
On a Lighter Note

If you have more time ...

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