🇮🇳 Modi’s back…?

PLUS: WeWork gets new Indian-origin CEO

Author

Ruchirr Sharma
June 03, 2024

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Good morning and happy Monday. This weekend was quite eventful:

  • Indian elections completed - results to be announced on Tuesday,

  • T20 Cricket World Cup kicked off, and

  • MrBeast surpasses T-Series to become the most subscribed YouTube account on the platform.

Kudos to MrBeast - but T-series, it’s time to get your lick back…

- Ruchrngd Sharma & Shatakshi Sharma  

📊 Markets

🇮🇳 India

Data as of market close on 31/5/2024

  • Indian stock markets halted their five-day loss on Friday with the Sensex and Nifty50 marginally up. Key gainers included Adani Group, Infosys, and banking shares. Broader markets and Realty and PSU Bank indices also improved, while IT and Media fell.

🌍️ International

Data as of market close on 31/5/2024

  • U.S. stock markets fell for the second day on Friday, led by poor tech earnings. Salesforce plunged 19.7% after missing revenue estimates. Economic data showed a GDP revision to 1.3%, decreased corporate profits, and a slight increase in jobless claims. Tech was the worst sector, while Real Estate and Utilities led the gains.

The WeWork Saga is quite a spectacle:

  • Founded in 2010.

  • By 2014, it had reached 15,000 members in 8 cities.

  • In 2017, SoftBank announced an initial investment of $4.4B at a $20B valuation.

  • Softbank invested another $2B into WeWork in 2019.

  • In the same year (2019), after billion-dollar losses and a cancelled IPO, WeWork pulled its IPO papers and laid off 20% of its global workforce.

  • In 2021, WeWork announced a merger with BowX Acquisition Corp. This resulted in WeWork becoming a publicly listed company with a valuation of about $9B.

  • In Nov 2022, WeWork announced plans to close 40 underperforming shared office locations in the U.S. This was in addition to over 240 full-lease exits and 480 lease amendments it had engineered since the start of 2020.

  • in Sept 2023, WeWork executed a 1-for-40 reverse stock split after its shares fell below $1 each, and the company was at risk of being delisted from the New York Stock Exchange.

  • In Nov 2023, WeWork filed for bankruptcy.

But now, here we are. 

To revamp the once-highly-valued company, the bankrupt WeWork has appointed Indian-origin software tycoon Anant Yardi as its new CEO. Yardi acquired a majority stake in WeWork on May 30 after infusing the company with over $200M in equity and debt over the past two years.

The 76-year-old Yardi, who migrated to the U.S. after graduating from IIT-Delhi in 1968, founded Yardi Software in 1984, a property management software company. Despite his success in the U.S., Yardi has remained connected to his Indian roots, recently donating $10M to IIT-Delhi for AI research.

Expressing confidence in reviving WeWork's fortunes, Yardi, who runs the $3B Yardi Software, stated, "It didn't seem right to let it go down. There's also a tremendous opportunity to turn around WeWork." He aims to market WeWork to small businesses post-bankruptcy.

Overall: With this move, Yardi joins the growing list of Indian-origin CEOs leading major global corporations, including Sundar Pichai (Google), Satya Nadella (Microsoft), Ajay Banga (World Bank Group), and others.

Time will tell if Yardi's vision and leadership can breathe new life into the once-promising WeWork, transforming it into a sustainable business model.

Read more: Inc 42

Source: BBC

According to exit polls published on Saturday, Indian Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) are poised for a resounding victory in the country's general elections, securing a third consecutive five-year term. 

The polls, conducted by six Indian TV stations and agencies, projected the BJP-led National Democratic Alliance (NDA) winning between 353 and 401 seats in the 543-seat Lok Sabha, easily beating the opposition INDIA alliance.

What does this mean? 

  • The decisive mandate would bolster Modi's image as one of the world's strongest leaders at the helm of a fast-growing economy with increasing geopolitical clout. 

  • Modi campaigned on his government's welfare programs, poverty reduction efforts, and economic development record, with India's GDP growing at 7.8% in the last quarter.

  • The opposition INDIA alliance, led by the Indian National Congress, sought to attack the BJP on issues like persistent high unemployment but failed to resonate with voters, according to the exit polls.

Are exit polls reliable?

  • While exit polls have a mixed record in accurately predicting Indian elections, they have proven more reliable in recent years. 

  • They correctly forecasted the BJP-led NDA victories in 2014 and 2019, though they underestimated their seat counts.

  • Senior opposition leaders, including Congress' Sonia and Rahul Gandhi, claimed they would win at least 295 seats, accusing the exit polls of being "government surveys" subject to manipulation.

Overall: If the official results on June 4 confirm the exit poll predictions, it would significantly endorse Modi's leadership and provide continuity for economic reforms and policy initiatives.

Read more: Financial Times

🗞️ Bite-sized summaries

💳️ Stripe is out of India - The US digital payments giant Stripe has shifted to an 'invite only' mode for merchants in India, citing the country's strict Know Your Customer (KYC) requirements as one of the reasons. This move indicates Stripe may be withdrawing from India's domestic payments market to focus on cross-border payment opportunities. The company stated it will only be able to support more Indian merchants by the second half of 2025. India's evolving regulatory landscape, including a recent Reserve Bank of India mandate for full KYC of merchants using online payments, has made it challenging for Stripe to onboard new users quickly in the country. While valued at $65 billion globally, Stripe has seen limited scale in India since entering in 2016, despite receiving a payment aggregator license from the RBI earlier this year.

📈 Positive ratings - S&P Global Ratings has upgraded its outlook on India's sovereign credit rating to 'positive' from 'stable', while retaining the rating at 'BBB-'. The rating agency cited India's robust economic growth, improvement in government spending quality, and commitment to fiscal consolidation as the key drivers behind the outlook upgrade. It expects India's economy to expand at around 7% annually over the next three years, which should moderate the government debt-to-GDP ratio despite high fiscal deficits. S&P projects India's general government deficit to decline from 7.9% of GDP in fiscal 2025 to 6.8% by fiscal 2028. The positive outlook signals a potential rating upgrade if fiscal deficits narrow meaningfully or inflation stays low. However, an erosion of commitment to sustainable public finances or widening current account deficits could revert the outlook to stable.

🚀 3D rockets…in space - In a historic achievement, Indian space startup Agnikul Cosmos successfully launched the world's first rocket powered by a fully 3D-printed engine, called "Agnibaan - SOrTeD," from India's first privately-developed launchpad "Dhanush" at Sriharikota. This test flight, using India's first indigenously designed and manufactured semi-cryogenic engine, marks a major milestone for India's nascent private space industry. The launch was witnessed by prominent figures like ISRO and IN-SPACe chiefs who hailed it as demonstrating Indian innovation prowess and the potential of private players. With this success, Agnikul, incubated at IIT Madras, aims to provide affordable customizable launch solutions and is set for an orbital mission using its "Agnibaan" rocket by the end of 2025, ushering a new era of private space exploration in India.

🧑‍🍳 What else is cookin’?

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

🍿 Entertainment, Entertainment, Entertainment

  • T20 World Cup

    • West Indies pushed to limit by plucky PNG in their T20 World Cup opener, scrambling a 5-wicket victory.

    • Upcoming matches:

      • Nambia vs Oman at 1.30 am IST

      • Sri Lanka vs South Africa at 3.30 pm IST

  • All Rise: Suits Season 9 is coming to Netflix in July.

  • From premiere date to expected contestants, host and more: All you need to know about Bigg Boss OTT 3.

  • Mr & Mrs Mahi review: Janhvi Kapoor & Rajkummar Rao hit it out of the park?

  • Real Madrid beat Dortmund 2-0 in the Champions League Final to win their record 15th UCL trophy.

And that’s all for today folks - have a lovely day and we’ll see you tomorrow.