❄️ Air conditioning

Good morning and Happy Tuesday.

We’re thrilled to announce that UNR has officially rebranded!

We've been busy behind the scenes this past week, striving to bring you the best version of our newsletter.

As one of the fastest-growing economies in the world, India presents a dynamic landscape, and we're here to help you navigate it.

Without further ado, let’s dive in!

- Ruchirr Sharma & Shatakshi Sharmaa

TABLE OF CONTENTS

• ❄️ Air conditioning

• 📉 Trouble in Paytm’s paradise

• 🗞️ Bite-sized summaries

  • 🇺🇸 Assassination attempt

  • 💰️ Billionaire in a blink

  • 💳️ Sale of Pureit

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• The benchmark equity indices ended Monday positively. The NSE Nifty 50 rose 84.35 bps and the BSE Sensex increased 145.51 bps. Largecap and Midcap stocks led the gains. The Bank Nifty index rose 177 bps, with media and banking stocks outperforming, and IT stocks declining.

🌍️ International

• Wall Street rallied after a failed attack on Former President Trump, boosting his re-election chances. Investors expected looser regulations, benefiting crypto, prison operators, and Trump-linked firms. Expectations of Federal Reserve rate cuts increased risk appetite, however, Trump's potential return hurt renewable energy stocks and U.S.-listed Chinese firms, while Trump Media & Technology Group and crypto stocks surged.

TRENDS

❄️ Air conditioning

It’s officially summertime in India, which means the weather outside is hotter than your ex’s temper. 

Yet only 7% of Indian households have an AC, compared to 88% in the U.S. and 91% in Japan.

Appliance manufacturer Blue Star is eyeing this scorching opportunity, with their annual report suggesting that India's AC industry is about to go from simmer to full boil:

• Current value: ₹27,500 Cr. ($3.3B)

• 2028 projection: ₹55,000 Cr. ($6.6B)

Here are some key growth drivers include:

• Low penetration of room ACs.

• Rising middle class with higher disposable incomes.

• Increasing demand from Tier III, IV & V markets.

• Changing weather patterns leading to hotter summers.

Given these details, Blue Star's Chairman, Vir Advani, is expressing a lot of optimism about the company's future outlook.

And they aren’t just fanning themselves - they've got a 3-year plan cooler than the other side of the pillow:

• Outpace market growth.

• Improve margins through cost management.

• Focus on prudent financial management.

• Develop leadership and succession planning.

The bottom line: With FY24 revenue up 21.4% to ₹9,685.36 Cr. and a market share of 13.75% in room ACs, Blue Star's positioning itself to leverage its expertise, extensive network and brand equity to capture a significant share of this expanding market.

Read more: Economic Times

STOCKS

📉 Trouble in Paytm’s paradise

Recent months have proven challenging for Paytm, India's pioneering fintech company. 

The company's stock has experienced a dramatic decline, plummeting approximately 61% since October 2023, positioning Paytm as one of the worst-performing stocks globally and at the bottom of India's Nifty 500 index.

The catalyst? Regulatory action

The primary trigger for this decline was the Reserve Bank of India's (RBI) January 2024 order, instructing Paytm's banking affiliate to halt much of its business. Specifically, the RBI mandated Paytm Payments Bank Ltd to wind up all banking activities by March 15, 2024. This regulatory action dealt a severe blow to the fintech pioneer.

Now, in a notable development, SoftBank Vision Fund, a major investor, exited its position in Paytm last month. This move resulted in a loss of approximately $150M, representing a 10-12% decline on their initial investment. Key details of SoftBank's investment journey include:

1. Initial investment: Approximately $1.5B in 2017 through multiple tranches.

2. Pre-IPO stake: 18.5% in One97 Communications, Paytm's parent company.

3. Exit strategy: Aligned with SoftBank's plan to divest Paytm holdings within 24 months of the IPO.

4. Unexpected outcome: The loss was reportedly not anticipated at the time of the divestment announcement.

Other high-profile exits

SoftBank's exit follows another significant divestment. In November 2023, Warren Buffett's Berkshire Hathaway sold its 2.6% stake in Paytm, also incurring a loss.

Paytm's performance since IPO

Paytm's stock has struggled to gain traction since its IPO in 2021:

• The stock has never reached its issue price of ₹2,150.

• The RBI's regulatory action against Paytm Payments Bank further exacerbated the situation.

Despite these challenges, Paytm has shown some positive indicators:

• The company reported narrowing losses for the fiscal year ending March 31, 2024.

• This performance demonstrates a degree of resilience in a challenging business environment.

Overall: As Paytm navigates these turbulent times, investors and industry observers will closely watch how the company adapts to regulatory changes and works to regain market confidence.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🇺🇸 Assassination attempt - Former President Donald Trump was shot and injured during a campaign rally in Butler, Pennsylvania. The assassination attempt, carried out by 20-year-old Thomas Matthew Crooks, resulted in Trump suffering a bullet wound to his right ear. One spectator, Corey Comperatore, was killed while shielding his family, and two others were critically injured. The shooter, positioned on a roof about 400 feet from the stage, fired 6-8 rounds before being fatally shot by a Secret Service sniper. Trump was quickly evacuated and treated at a local hospital. The FBI is investigating the incident as a potential case of domestic terrorism, with no clear motive yet established. Both President Biden and Trump himself have called for unity in the wake of the attack. The incident has raised questions about security measures at public political events and sparked discussions on political violence in America.

💰️ Billionaire in a blink - Deepinder Goyal, the 41-year-old founder and CEO of Zomato, has become India's newest billionaire following a significant rally in the company's stock price. Zomato's shares hit a lifetime high of ₹232 on the Bombay Stock Exchange, surging over 300% since July 2023. This increase has pushed Zomato's market cap past ₹1.9 lakh crore and Goyal's net worth beyond ₹8,000 Cr. The surge is attributed to the strong performance of Zomato's quick commerce business, Blinkit, which outperforms competitors and is expected to turn profitable earlier than anticipated. Goldman Sachs now values Blinkit higher than Zomato's core food delivery business.

💳️ Sale of Pureit - Hindustan Unilever Limited (HUL) approved the sale of its water purification business, Pureit, to A.O. Smith India Water Products for ₹601 Cr. ($72M). The sale, to be conducted on a slump sale basis, aligns with HUL's strategy to focus on its core categories. Pureit, launched in 2004 and expanded nationwide in 2008, has been a significant player in the water purification market. A.O. Smith views the acquisition as complementary to its existing operations in India, praising Pureit's brand recognition and customer service. The move is expected to strengthen A.O. Smith's position in the Indian water treatment market, with the company welcoming the Pureit team's expertise and consumer understanding.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Trump’s VP pick is JD Vance, ending his search for a presidential running mate.

• Google parent Alphabet eyes ‘biggest’ acquisition ever with $23B proposed buyout of cybersecurity firm Wiz.

• Apple’s annual sales in India set new record.

• Thailand to roll out disputed $13.8B plan in digital money to citizens.

• Nearly 80% of gig workers meet Indian job market requirements.

• Japan turns to AI romance apps amid rising loneliness, falling birth rate.

• TCS announces plans to hire 40,000 freshers this year.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Wimbledon 2024 winners:

  • Carlos Alcaraz wins his second Wimbledon in a straight-set match against Novak Djokovic;

  • Barbora Krejčíková wins her second gram slam final in a 3-set match against Jasmine Paolini;

  • Hsieh Su-Wei & Jan Zielinski beat Santiago Gonzalez & Giuliana Olmos in straight sets to secure the mixed doubles title;

  • Taylor Townsend & Katerina Siniakova beat Gabriela Dabrowski & Erin Routliffe in straight sets to secure the women’s doubles title;

  • Patten & Heliovaara win the men’s doubles against Max Purcell & Jordan Thompson in a 3-set final.

  • Big day for Spain on Sunday with Spain also winning the Euro final against England 2-1.

• Janhvi Kapoor, Gulshan Devaiah and other cast members of Ulajh launch the film’s trailer.

• Sonam Kapoor And Anand Ahuja, Parineeti Chopra And Raghav Chadha show their English best for the Wimbledon finals.

• Anant Ambani and Radhika Merchant continue their extravagant wedding - Vogue gives an inside look.

• ‘Stranger Things’ Season 5 first look revealed by Netflix: “Best Season Yet”