News in Numbers, Mar 03, 2017: Alibaba’s e-commerce move 💻💰📦

$200 million

What is it? Amount of investment from two investors – Alibaba Group Holding and SAIF Partners – in Paytm’s E-commerce venture.

Why is it important? This signals serious interest in the Indian market by China’s largest E-commerce firm, Alibaba, which has picked up 36% stake in Paytm’s E-Commerce venture.  SAIF Partners will hold 4.66% stake.

Tell me more: Indian E-Commerce market slowed down significantly in calendar 2016, after posting three-digit growth in previous years. It grew by 12% to $14.5 billion in 2016.

 

64%

What is it? The growth in wealth of the top 100 richest Chinese parliamentarians and members of a top advisory body, after Chinese premier Xi Jinping took power four years back.

Why is it important? This is in sharp contrast to the Chinese premier Xi Jinping’s crackdown on corruption and plan to remove poverty after coming to power in 2013. Instead, the wealth of those in the political upper echelons who are already dollar-billionaires, have grown from 1.84 trillion yuan in 2013.

Tell me more: Beyond the richest 100, the combined wealth of all the delegates (209), half of whom are dollar-billionaires, is around 3.5 trillion yuan ($507 billion), according to the Hurun report.

 

$24.48

What is it? The closing value of the stock of Snap Inc., owner of Snapchat, a popular photo-messaging app, on its debut on the New York Stock Exchange.

Why is it important? The stock closed 44% up from its initial public offering price of $17 a share despite steep competition from other listed players such as Facebook (with its acquired instant messaging app, Whatsapp), huge losses in 2016 and slowing user additions.  This points to investor-demand for technology stocks, this being one of the most anticipated in three years since Twitter’s debut.

Tell me more: Snap Inc. now has a valuation of $28.3 billion, and the $3.4 billion it raised in the IPO was more than the 2013-Facebook offer of $ 3 billion.

 

35%

What is it? Amount of freight discount offered by Indian Railways to bulk customers, who will guarantee minimum amount of traffic.

Why is it important? Goods traffic brings in maximum revenue and cross-subsidizes losses from running passenger trains for Indian Railways, and freight revenue declined by 8% in current financial year. This move is aimed to stem the loss and bring back traffic to Railways.

Tell me more: The discount is available to bulk customers, except for coal transport, and is valid for five years.

 

99 million

What is it? Number of TV-owning households in rural India, as compared to 84 million in urban areas, as per Broadcast India survey.

Why is it important? This could impact how Rs 181.3 billion worth of TV advertisement money will be spent. The increase in rural viewership could also make program producers to cater to this audience.

Tell me more: The survey covered 3 lakh homes in 590 districts between November 2015 and February 2016.

Read More

News in Numbers, Feb 28, 2017: Airports still in the red ✈

51.11%

What is it? The percentage of stake in Hindustan Petroleum (HPCL) that will be transferred to the Oil and Natural Gas Corporation (ONGC) by the central government.

Why is it important? This will create an integrated oil company bringing together India’s largest oil producer, ONGC with HPCL, third largest refiner and retailer. This was one of the announcements made by Finance Minister Arun Jaitley in the budget speech.

Tell me more: The transfer will have to be followed by an open offer for another 26% shares from the open market.

 

200 million

What is it? The number of wallet users (transacting users) with Paytm, a mobile wallet and payments operator.

Why is it important? The largest mobile wallet service by reach has reaped the benefits of the cash ban. Its subscriber base increased by 50 million post November 8th last year, when demonetisation was announced. By the end of November, Paytm, like its competitors, had increased their advertising spends, by 300%, to tap an audience looking for ways around the cash crunch.

Tell me more: Paytm’s immediate competitor, Freecharge, has had a rougher ride, with its parent Snapdeal struggling to raise funding for it. Its CEO quit last week.

 

120 million

What is it? The number of shares of Apple Inc. that Warren Buffet’s Berkshire Hathaway bought in 2017.

Why is it important? This makes Apple one of the largest holdings of the investment wizard’s company. Berkshire, fuelled by Buffet’s acumen, is often considered a bellwether of the US stock market. It took its total shares of the iPhone-maker to 133 million. At about $17 billion in value, the stock is now among the top six of Berkshire’s holdings worth $10 billion and above.

Tell me more: In a media interview, Buffet reasoned with “Apple strikes me as having quite a sticky product.”

 

Rs 2 trillion

What is it? Amount of central government procurement each year(excluding defence) proposed under the ‘Buy Indian’ policy.

Why is it important? The policy, if implemented, will boost local manufacturing through price preference, and relaxation in turnover and experience conditions. It might increase cost of buying goods for central government, but has potential to create local jobs given the size of purchase.

Tell me more: The proposed policy will not violate international trade rules. WTO permits governments to have sourcing preference if it’s for own consumption.

 

13

What is it? The number of airports managed by the Airports Authority of India (AAI) that are profitable. AAI manages 125 airports in India.

Why is it important? Shows that traffic is not adequate to support the cost incurred, and AAI was not able to monetize non-aero revenues like the ones managed by the private sector in Delhi and Mumbai.

Tell me more: There was no traffic in 30 of the loss making airports managed by AAI.

Read More

When start-up investors became wary

This piece originally appeared on Livemint.com

 

In April 2015, the Indian unicorn club—start-ups with a valuation over a billion dollars—got two new members: Paytm and Zomato. They joined the earlier elite of Flipkart, Snapdeal, Ola, Mu Sigma and InMobi, among others.

2016 turned out to be different, as international competitors, especially Amazon and Uber, got more aggressive in India. Amazon recently launched Prime Video and Uber CEO Travis Kalanick joked that he would apply for Indian citizenship, even as Indian entrepreneurs complained about capital dumping from their competitors abroad. Zomato, a restaurant search service with global ambitions, and Flipkart, one of India’s earliest to breach the $1 billion club, saw investors such as Morgan Stanley and HSBC Securities lower their valuations (see charts 1 and 2).

The concern about a low ratio of online shoppers/spenders to Internet users loomed large, and demand for online services were not picking up pace the way fund houses had hoped. Of course, Indian companies were not the only ones drawing flak. Global companies also saw markdowns. Investors’ wariness reflected in their average investments in 2016 (see chart 3).

 

strtup1

strtup2

strtup3

 

 

Read More

Chart of the Day | How long did Indian Unicorns take to reach billion dollar valuations?

Average: About five and a half years.

India’s first Unicorn in the CB Insight’s list took less time than that – about five years. Ola, Snapdeal and Hike took four years, while Mu Sigma, which was founded in 2004, took nine.

But we have to remember that these are paper unicorns, and a more credible valuation will happen when there is a merger or an IPO. A report by SharesPost, a platform for investing in pre-IPO companies, has predicted that about a third of US tech unicorns will eventually be worth less than $1 billion. Of the nine Indian unicorns, four (Flipkart, Snapdeal, Ola and Paytm) have valuations over four billion dollars. The rest are valued at less than $2 billion.

Read More