🤝 Trust issues

Good morning. Paul Mescal and Gracie Abrams are confirmed to be dating.

That’s all. Take it easy today folks. We understand.

- Ruchirr Sharma & Shatakshi Sharmaa

TABLE OF CONTENTS

• 🤝 No trust in Reliance Disney merger

• 🛵 Blinkit and you’ll miss it

• 🗞️ Bite-sized summaries

  • ♨️ No doping for World No. 1

  • 🚕 Import tariffs on EVs

  • 🤝 India continues to make geopolitical friendships

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian stock market indices rose on Tuesday, led by strong gains in financial and IT sectors. The Sensex and Nifty50 closed higher, with top gainers including Bajaj Finserv, IndusInd Bank, and Tech Mahindra. Broader market indices also closed in the green, with sectoral indices like Nifty PSU Bank, Financial Services, and IT among the top performers.

🌍️ International

• U.S. stocks closed slightly lower ending a recent winning streak amid light trading ahead of the Jackson Hole Economic Symposium and revisions to employment data. Investors were cautious, waiting for clues on the Fed's policy path. Tensions around the Democratic National Convention also contributed to market volatility.

MERGERS AND ACQUISITIONS

🤝 No trust in Reliance Disney merger

The $8.5B merger between Reliance and Disney Hotstar can potentially create a media giant in India, but not without facing significant regulatory challenges.

Here’s the situation:

• The Competition Commission of India (CCI) has raised alarms about the proposed merger, warning that it could harm competition in the Indian media landscape. 

• This development is a major setback, as the CCI has privately expressed its concerns to both companies, urging them to explain why an investigation should not be initiated.

The merger is particularly contentious due to the considerable control it would grant over cricket broadcasting rights—an area with massive influence over advertisers. 

Antitrust experts have long cautioned that the deal, which would create India’s largest entertainment entity with 120 TV channels and two streaming services, could face intense scrutiny.

In response, Reliance and Disney have shown a willingness to sell fewer than 10 television channels to ease fears of market dominance. However, the CCI's scrutiny remains a significant hurdle, with experts predicting that the merger could secure up to 40% of the advertising market across television and streaming in India.

A key sticking point is the cricket broadcasting rights, which won’t be available for sale until 2027 and 2028, complicating the approval process further.

What’s next: The companies have 30 days to address the CCI’s concerns. If unresolved, the merger could face delays or require additional concessions.

This situation is reminiscent of 2022, when Zee and Sony's planned merger faced similar regulatory roadblocks and ultimately failed to materialise, despite efforts to secure approval through divestments.

Read more: Times of India

BUSINESS VALUATION

🛵 Blinkit and you’ll miss it

After continued periods of growth, UBS has pegged the enterprise value of Zomato’s quick commerce platform, Blinkit, at a striking $15.4B, making it a more significant contributor to Zomato’s overall valuation than its core food delivery business. 

The brokerage firm now values Zomato at $32.1B, a 15% premium over its current market cap of $27.8B.

Why it matters: 

• Blinkit’s rapid expansion and quick commerce dominance drive Zomato’s growth. 

• UBS estimates Blinkit holds a 40-45% market share, outpacing competitors like Swiggy’s Instamart and Zepto. 

• Plus, Blinkit’s aggressive plans to increase its network of dark stores from 639 to 2,000 by 2026 highlight its pivotal role in Zomato’s future.

But despite Blinkit’s lead, the quick commerce space is heating up. New entrants like Flipkart Minutes are entering the market with lower pricing strategies, which could ignite price wars. 

UBS noted that Flipkart’s prices are, on average, 10% lower than Blinkit’s, with additional cost benefits for customers.

While Blinkit steals the spotlight, Zomato’s food delivery business remains substantial, valued at $12.2B by UBS, down slightly from $13.2B. The segment continues to grow, with a 25% increase in food delivery volumes, surpassing market expectations.

So, what’s next? 

• UBS sees potential in Zomato’s emerging verticals like its “going-out” business, valued at $1.6B, which includes dining, live events, and ticketing. 

• Zomato is planning to launch a separate app, “District,” to capitalise on this segment. The company is also in talks to acquire Paytm’s movie and event ticketing unit, Insider, to bolster this vertical.

Overall: Zomato’s future looks bright, with UBS setting a price target of ₹320 per share. The growth in both quick commerce and food delivery, coupled with promising new ventures, positions Zomato for continued success in the Indian market.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

♨️ No doping for World No. 1 - World number one Jannik Sinner has been cleared of wrongdoing after testing positive twice for a banned substance in March. The Italian tennis star tested positive for low levels of a clostebol metabolite, a steroid found in a spray used by his physiotherapist, Giacomo Naldi. The International Tennis Integrity Agency (ITIA) accepted Sinner’s explanation that the contamination was accidental and not intentional. Although Sinner avoided suspension, he will lose his ranking points and prize money from Indian Wells. Sinner expressed relief and vowed to remain vigilant about complying with anti-doping regulations.

🚕 Import tariffs on EVs - The European Commission plans to impose five-year import tariffs of up to 36% on Chinese electric vehicles (EVs) to counteract what it sees as unfair subsidies. These duties, which could become permanent by October 2024, follow provisional tariffs introduced in July. Tesla, which manufactures in China, will face a lower 9% tariff due to fewer subsidies. Beijing strongly opposes the tariffs and has appealed to the World Trade Organization. The EU is open to alternative solutions but stresses that it’s up to China to propose them, aiming to balance protecting its auto industry while avoiding trade conflicts with China.

🤝 India continues to make geopolitical friendships - India and Malaysia have upgraded their ties to a "Comprehensive Strategic Partnership" following talks between Prime Minister Narendra Modi and Malaysian Prime Minister Anwar Ibrahim. This move marks a significant step forward after years of strained relations. The leaders discussed geopolitical issues, including Malaysia's interest in joining BRICS and regional stability in the Indo-Pacific. India also agreed to a special allocation of 200,000 metric tons of white rice to Malaysia. Despite previous tensions, including disputes over extradition and the Citizenship Amendment Act, the discussions were described as open and constructive.

HEADLINES

🧑‍🍳 What else is cookin’?

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

• Indian companies to spend $45-50B in capex over 1-2 years.

• Thirteen years after the breakup, Honda overtakes former partner to become the new Hero.

• IDBI Bank hikes FD rate to 7.85% for 444-day tenure.

• Ola Electric receives PLI approval for two more vehicle models.

• Biden says "I gave my best to you" and passes torch to Harris in DNC speech last night.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Premier League leaderboard here.

• Priyanka Chopra's Marathi production Paani gets a release date - 18th October 2024.

• Angry Young Men gets rave reviews: absolutely deserving of a documentary mini-series treatment

• Wait, Ananya Panday’s new series Call Me Bae looks real fun - trailer out now.