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Good morning, and happy Ayushman Bharat Yojana day!

What is it? ABY day is a celebration of the world's largest health insurance scheme, providing coverage to over beneficiaries belonging to poor and vulnerable sections in Uttar Pradesh, ensuring hospitalization and treatment services free of cost.

To put it simply, it’s India’s version of the NHS, only wayyy more efficient…

Let’s dive into today's edition!

- Ruchrngd Sharma & Shatakshi Sharma

📊 Markets

🇮🇳 India

🌍️ International

🏢 WeWontWork

WeWork, the once high-flying US-based office-sharing startup and now the subject of numerous documentaries (not for good reasons), is planning to withdraw from its India operations by selling its 27% stake in a deal reportedly worth INR 1,200 crore.

Here’s the TL;DR:

• The proposed transaction will diminish the ownership stake of Bengaluru-based property developer, Embassy Group, from 73% to 60% in WeWork's Indian business.

• The Enam Group family office will purchase the combined 40% stake held by WeWork and Embassy Group, investment fund A91 Partners, and CaratLane founder Mithun Sacheti.

• Although most of the INR 1,200 crore proceeds will originate from this secondary share sale, a primary capital raise might be considered later.

Why is WeWork leaving its India operations?

• The company's significant downfall left them vulnerable. This is not entirely surprising for a real estate company operating with tech multiples…

• Plus, the company, once valued at $47 billion/INR 392,381 Cr. and set for a massive IPO, filed for bankruptcy in the US market due to the burden of expensive leases, corporate cancellations, and the rise of work-from-home trends.

But this move is surprising because, despite these setbacks, WeWork’s India branch has remained stable and profitable, increasing profits from 14% in Q1 2019 to 27% in Q1 2023.

So what could this move be about?

1. Strategic play: After going through a near-collapse, WeWork may be strategically refocusing its business on core markets where it has stronger prospects. Exiting a relatively smaller market like India could be part of broader restructuring efforts.

2. Local competition: With domestic coworking operators like DevX and CoWrks coming into play, WeWork faces intense competition. Local players with lower costs could make it hard for WeWork to maintain profitable operations.

Read more: Outlook India

 🔑 Keys to India’s success

India’s economic rise has been a sight to behold, growing at a consistent ~6% over the last four decades and positioning itself as the 5th largest economy in the world.

However, to maintain this growth trajectory, policy continuity is essential, as pointed out by Rob Subbaraman, Nomura's lead economist.

• Nomura anticipates that India's economy will grow at an average of ~7% from 2024 to 2028, outperforming China (3.9%), Singapore (2.5%), and South Korea (1.8%).

• Subbaraman commended the policies of the Modi administration during its second term, stating, "The Modi team in Modi 2.0 has stepped up."

• As elections progress and a third term for Modi appears likely, Nomura highlighted that "consistency in policy and maintaining macroeconomic stability are key pillars of growth."

What's been driving this success?

• A significant factor in India's growth has been the increase in investment as a percentage of GDP, with Foreign Direct Investment (FDI) also making a substantial contribution.

• Although the growth of the manufacturing sector is just starting, its expansion is predicted to propel the economy forward over the next 3-5 years.

• Furthermore, the financial services sector, which contributes ~7% to the GDP, is gaining more influence in driving economic growth. Subbaraman noted that India's banking sector has seen improvements, resulting in enhanced oversight and standards among banks.

Overall: While optimistic about India's prospects, Nomura cautioned that the current growth recovery remains uneven, highlighting the need for a stronger economy to boost employment and mitigate risks from global spillovers.

Read more: CNBC

🗞️ Bite-sized summaries

📺️ Paramount CEO Bob Bakish steps down - After a troublesome couple of months, Bob Bakish ends his tenure leading the struggling media company as it considers a potential merger with Skydance amid pressure from controlling shareholder Shari Redstone. Bakish, once a staunch Redstone ally, will be replaced by an "office of the CEO" comprised of three top executives - Brian Robbins, George Cheeks, and Chris McCarthy. His departure comes as Paramount faces an uncertain future with dwindling cable TV subscribers, a fledgling streaming business, and ongoing talks for a merger or potential sale.

📊 U.S. IPO market is starting to heat up - Morgan Stanley expects 10 to 15 more tech IPOs in 2024 and an even "better year" in 2025 for U.S. capital markets as the IPO market regains momentum after a prolonged drought. With valuations returning to 2018-2019 levels, going public is more appealing, given that "the market has gotten more comfortable with paying for growth again." While megastars like SpaceX and Stripe likely won't go public soon, Stewart anticipates a solid pipeline over the next couple of years as the window reopens, aided by strong trading debuts for newly public tech companies. However, the upcoming U.S. presidential election could push some firms to hold off on IPOs until 2025.

🏭️ Fast grocery might not be a guaranteed success - In a major setback for the once-hyped online grocery delivery industry, Istanbul-based startup Getir announced it is withdrawing from the U.S., U.K., Germany, and the Netherlands markets to refocus resources on its core Turkish business. The company raised new funding led by Abu Dhabi's Mubadala and VC firm G Squared to bolster operations in Turkey, where it generates 93% of revenues. Getir, which promised ultra-fast 10-minute grocery deliveries and raised $1.8 billion at a $11.8 billion valuation during the pandemic, has seen its valuation plummet to around $2.5 billion amid struggles in the capital-intensive instant delivery space.

🧑‍🍳 What else is cookin’?

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

• Has Hindustan Unilever lost its pricing power?

• India’s tourism sector is expected to add 5 cr. jobs by 2023.

• Mahindra & Mahindra has become the revenue leader in SUV category.

• The New Balance “Snofers” proves that not every design needs to be pushed to production.

• Musk gets self-driving Teslas tentatively cleared in China during a surprise trip.

• Saudi Arabia spends big to become an AI superpower.

🍿 Entertainment, Entertainment, Entertainment

• “Under the Bridge,” a Hulu original has been taking the internet by storm bringing awareness of the 1997 tragedy of Reena Virk and raising concerns about the consequences of bullying.

• KKR won by 7 wickets against Delhi Capitals, firmly holding its position at number 2 on the leaderboard.

• Diljit Dosanjh, true to his name, stays winning hearts with his latest Vancouver show, Dil-Luminati which housed ~50K concertgoers.

• Fan favorite Rafael Nadal beats Pedro Cachin to reach Madrid Open fourth round.