📊 Technical issues

PLUS: Zepto joins the EV game

Author

Ruchirr Sharma
June 04, 2024

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Good morning. Tesla went public in 2010 at a $1.5B valuation.

Today, it’s worth north of $500B.

That means if you invested $10,000 at its IPO, that investment would be worth $1.3M today 💰️ 

The case for building a time machine grows stronger and stronger…

- Ruchrngd Sharma & Shatakshi Sharma  

🧵 In today’s issue:

  • 📊 Markets recap

  • 💲 Zerodha faces technical issues (again)

  • 🚗 Zepto joins the EV game

  • 🗞️ Bite-sized summaries

    • Ola Electric to lay off 400-500 employees

    • Cricket World Cup’s cash prizes are the highest they’ve ever been.

    • India goes all in on Deep Tech

  • 🧑‍🍳 What else is cookin’? (quick links)

  • 🍿 Entertainment, Entertainment, Entertainment

📊 Markets

🇮🇳 India

Data as of market close on 3/6/2024

  • Ahead of the Lok Sabha election results, BSE Sensex and Nifty50 saw their largest one-day rally since 2009. Sensex rose 3.4% to 76,469, and Nifty50 increased 3.25% to 23,264, both hitting record highs. SBI led the gains with a 10% increase. The BSE MidCap and SmallCap indices also climbed 3.54% and 2.05% respectively.

🌍️ International

Data as of market close on 3/6/2024

  • U.S. stocks showed mixed results amid economic growth concerns and potential Fed rate cuts. The S&P 500 and Nasdaq saw a slight increase, largely due to tech stocks like Nvidia, whereas the Dow fell. Trading was temporarily halted for some NYSE stocks due to a technical issue. GameStop surged by 21% following the disclosure of a significant investment. Investors will be closely monitoring this week's economic reports, such as job data, for indications about the Fed's rates.

Indian retail traders were not happy this Monday morning. 

And no… it wasn’t due to the Monday Blues. 

Online brokers Groww and Zerodha, India's largest and second-largest brokers respectively, experienced system outages early Monday, preventing users from logging in or executing trades. 

This would have been ok, except: 

  1. It happened on a day when markets were exuberant due to exit poll results suggesting the return of the Modi-led BJP government.

  2. It happened before the trading day began, preventing retail investors from adjusting their portfolios and bracing themselves for market volatility. 

What was the issue? 

  • Part of the problem stemmed from issues at CDSL (Central Depository Services Limited), one of the two depositories mandated to store securities held in demat accounts. 

  • Brokers faced connectivity problems with CDSL, resulting in users not receiving the TPIN required for trading.

Such glitches on heavy trading days are not uncommon and are typically due to two factors: 

  • Risk-based issues where brokers' systems cannot handle a sudden spurt in trading activity, and 

  • Integration issues with exchanges and depositories.

The only problem? It’s been happening quite consistently this year. 

  • So far in FY24, 57 brokers reported at least one system glitch to the NSE, with Zerodha reporting six, Groww three, and Upstox five.

  • Brokers argue that building capacity to handle peak demand is architecturally complex and costly, especially when they offer free delivery-based trades. 

  • Regulators like SEBI have mandated brokers to declare all glitches lasting over five minutes but do not penalise based on duration or user impact.

Overall: While users often demand compensation for unexecuted trades, brokers are clear that they merely facilitate trades and are not responsible for outages, as per user agreements. 

P.S.: Aggrieved users can file complaints on SEBI's SCORES platform, which may lead to arbitration or litigation.

Read more: Forbes India

EV is all the rage today. 

Why? Well, because they reduce: 

  • Environmental impact: EVs emit no pollutants, reducing air pollution and mitigating climate change.

  • Operating costs: Energy-efficient EVs have lower fuel costs, offering significant lifetime savings.

  • Maintenance costs: With fewer moving parts, EVs incur lower lifetime maintenance costs.

And the list goes on… 

Indian companies are starting to take note, and recently, Battery Smart, an electric two-three-wheeler battery swapping network operator, partnered with Zepto, the e-grocery and quick commerce platform, to provide Zepto's delivery partners, with access to over 1,000 Battery Smart battery-swapping facilities across more than 30 cities in India.

Here’s the TL;DR: 

  • The partnership enables Zepto to rapidly scale its EV fleet by deploying 10,000 new EVs in FY25.

  • Zepto's delivery partners can leverage Battery Smart's "battery-as-a-service" model, reducing the upfront capital expenditure needed to purchase an EV without a battery.

Why now?

  • Yogiraj Gogia, Senior Director at Battery Smart, stated that the tie-up will empower more delivery partners to adopt electric mobility and enable greener last-mile deliveries for Zepto as it continues its remarkable growth.

  • Vikas Sharma, Zepto's COO, highlighted that Battery Smart's extensive swap station network ensures zero wait time for their partners, allowing them to complete more deliveries and increase earnings.

Overall: Currently, EVs hold a 20% share in the country's last-mile delivery market, reflecting the growing trend towards sustainable logistics solutions - and this partnership aligns with the government's target of achieving 30% electrification of India's vehicle fleet by 2030.

🗞️ Bite-sized summaries

😢More layoffs - Ola Electric, the electric vehicle arm of Ola Group, is planning to lay off 400-500 employees across multiple verticals as it looks to streamline operations and cut costs ahead of its planned initial public offering (IPO). The final number of layoffs may change as the senior leadership finalizes the scale, but the move aims to make Ola Electric leaner and more profitable. This comes after Ola's ride-hailing business, Ola Cabs, laid off around 200 employees in April. The electric scooter maker reported a net loss of Rs 1,472 crore in FY23 on operating revenue of Rs 2,631 crore.

🏏 Cricket pulls in the big bucks - The International Cricket Council (ICC) announced a record-breaking prize fund of $11.25M for the Men's T20 World Cup 2024, making it the highest prize for the tournament. The winners will receive at least $2.45M, while the runners-up will get $1.28M. Teams will earn $31,154 for each match won except for the semi-finals and final.

🧑‍💻 India goes all in on Deep Tech - India's Commerce and Industry Ministry plans to propose a policy dedicated to deep tech startups, such as those focused on AI, machine learning, and biotechnology, in the upcoming Budget post the Lok Sabha election results. This policy aims to address these startups' challenges and foster innovation, thereby creating a conducive ecosystem. It's expected to enhance research, enable intellectual property creation, provide funding support, develop infrastructure, set standards, and build capacity in deep technologies.

🧑‍🍳 What else is cookin’?

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

🍿 Entertainment, Entertainment, Entertainment

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