Happy Birthday India🇮🇳
Good things are coming our way, and we're more than ready to put the work in!
A Happy 75th Independence Day to all our readers!🇮🇳
The past 74 years have not all have been easy for us multiple wars, countless struggles, and conflicts, multiple markets crashes, and much more! But, in the end, we have always triumphed as a country! These are some difficult times for us as a Country, Covid-19 has taken many loved ones from us, let's get together and help each other out.
Modern India is on the path to become the latest Super Power of the world, not just in terms of arms and military, but in every sector! Indian FinTech industry is currently times more ahead of the western countries. India supplied a large portion of vaccines to the World in the fight against Covid-19. Earlier Indian startups used to get acquired by Foreign Giant's, but the tables have turned lately! Many Indian Brands are now acquiring famous and reputed International Brands. Won't be surprised if an Indian Company breaks into the most valuable companies in the world list in the coming years!
"Good things happen to those who wait, but only the things that are left by those who hustle" - Abraham Lincoln
Indian indices hit fresh records on Friday with the Nifty crossing the 16,500 mark and the Sensex surpassing the 55,000 level for the first time. Thanks to the inflation data, which showed that inflation eased at 5.59% as compared to the 2 consecutive prints that were both north of 6%, the market sentiment was evidently bullish. This reflected the rising hopes of the market that the RBI will persist with its accommodative monetary policy.
The Sensex closed at 55,437.29 after scaling an all-time high of 55,487.79 on Friday. The Nifty closed at 16,529.10 after reaching an all-time high of 16,543.60 during the day. The gradual easing of restrictions has also been a factor that has helped keep the bullish momentum intact despite apprehensions regarding share valuations exceeding the comfort zone. This run was led by consumer and technology stocks.
The IPO Saga Continues…
The IPO tales continued in August with 9 companies filing draft red herring prospectuses (DRHPs) with the regulator. Medanta and others are set to file IPO papers in the next few days. Last week Nykaa, Adani Wilmar, PB Fintech, and Popular Vehicles filed DRHPs to raise up to Rs. 15,3000 crore. Companies that filed IPO papers this week include Gemini Edibles & Fats India, Fusion MicroFinance, Keventer Agro, Tarson Products, Ixigo, Sapphire Foods India, Prudent Corporate Advisory Services, Tracxn Technologies, and Sigachi Industries.
Is the EV Revolution here?
Electric Vehicles are buzzing again and this time with positive energy for the industry. With the recent introduction of the Ola electric scooter, the Indian government planning to cut down on import duties on EVs and the latest Handbook of EV Charging Infrastructure by NITI Aayog. In this article, we look into the prospects and challenges of EVs for Indian markets.
Prospects of Indian EV Market
India is part of the global EV30@30 campaign, aiming to have 30% of the new vehicle sales be electric by 2030. To achieve the twin objectives of reducing GHG emissions as well as reducing dependence on the Middle East for its energy needs (and save precious forex), GOI has been focusing on Renewable Energy and Green Technologies in recent years.
Elon Musk-CEO of Tesla is planning on introducing affordable EVs for Indian markets who were in news for "lashing out" at the import duties imposed on EVs in India. The government is planning to cut down on import duties on EVs amidst current calls to reduce them.
With the launch of Tata UniEVerse, Tata Motors has indicated its intention of exploring opportunities in the EV Ecosystem. It certainly has an advantage among domestic players with its SUV, Nexon EV, and is already a leading player.
Tata Motors does stand out as six Tata Group companies have come together to collectively build this EV ecosystem containing products and services ranging from battery cells to be manufactured by Tata Chemicals, Tata Autocomp working for localization of the battery pack assembly and motor assembly, and Tata Power providing charging solutions. EVs are different than conventional vehicles not just in the technology used, but also in the experience provided by the vehicle. To revamp this aspect, TCS, Croma, and Tata Motors Finance are engaging to provide payments interface, digital retail experience, and financing solutions to the customers. This reflects the vision of the Tata Group to transform the automobile sector itself.
Thus, the moves by both the private sector and the government are reassuring of the demand for economical EVs in near future especially in the backdrop of rising fuel prices.
Major Barriers to EV Adoption
The idea of owning an EV right now is not so prospective given that, the costs of owning an EV in India are quite high. For example, the average cost of insuring Tata Nexon EV is around Rs 1.07 lakh whereas, for the petrol model, it is Rs 56k. Although Tata has introduced Tigor in the economy class, the lack of alternatives in that class and higher prices of other cars is the major barrier.
EV Charging Infrastructure is probably the biggest impediment to the adoption of EVs in India. NITI Aayog in its recent 'Handbook to Guide Electric Vehicle Charging Infrastructure in India' stated the need to have at least 4 lakh charging stations by 2026 (it's only about 2k today).
Renewable Energy sources need to be expanded to truly make the purpose of EV i.e. to limit carbon emissions a reality. India has achieved about 100 GW of renewable energy capacity (146 GW including big hydro projects). There's no point in burning fossil fuels to charge your EV.
Other things that influence the adoption of EVs in India are operational challenges like charging time, undeveloped policy landscape for EVs in India, and high capital costs.
What can consumers and investors expect?
The revolution in the EV market is at dawn today. Increased awareness about climate change should make people shift to Green Technologies, and the recent moves by the private sector reflect this mood of the consumers.
EV charging infrastructure is expected to be established in the next 5 years along with the entry of domestic and foreign automobile industry players in manufacturing.
For investors, charging infrastructure, up-gradation of service providers like garages, and potentially equity market could yield good returns in the medium to long term.
E-Rupi - The next Step in Indian Financial Revolution
National Payments Corporation of India (NPCI) in association with the Department of Financial Services (DFS), National Health Authority (NHA), Ministry of Health and Family Welfare (MoHFW), and partner banks, has launched an innovative digital solution – e-RUPI recently.
But what is e-Rupi?
The simplest analogy one can give to help you understand what is e-Rupi is the recharge vouchers that we used a decade ago to recharge our mobiles.
e-Rupi is also a token of fixed value but the authorities can dictate where this token can be used. Similar to recharge vouchers - they can be only used to recharge mobiles, e-Rupi can be configured to be used for buying Petrol or grocery or anything that we want to specify.
Instead of physical vouchers, e-Rupi will be distributed via QR Codes and codes sent via SMS. One can just show the QR Code or SMS to the intended retailer and the designated amount will be directly transferred to his/her bank account.
Why do we need it?
Even though with the rise of UPI and Neo Banks, India remains a country that is very much Cash dependent. And no matter whenever Cash comes into the picture, problems like corruption, fake currency, and security come into the picture.
e-Rupi can be a solution to some but not all problems of the Indian financial system. Let's take an example where e-Rupi can be used very effectively. Imagine a system wherein the underprivileged receive an e-Rupi voucher for a monthly ration, since it can be only used at the ration store, they can't spend it on alcohol or other sin goods! It's just a small example but, such small changes can have a huge impact on society!
What does the future hold?
e-Rupi is the foundation of making a digital currency ecosystem. But, not only we have started a digital financial revolution, but at the rate at which Indian Financial Ecosystem is evolving, we are on the path to becoming a FinTech superpower of the world. With the talks of the UPI platform being exported to foreign countries, it won't be surprised if we become an exporter of e-Rupi too! Especially the underdeveloped countries where corruption remains a big issue.
Let us know what do you think about e-Rupi in the comments!
Book of the Week📚
This is a new section where we talk about our favorite books and give the readers a gist about the book. We start our book recommendations with one of the best books written on the legendary Warren Buffett: The Warren Buffett Way by Robert G. Hagstrom.
This book explains Warren’s investment philosophy and talks about some of the most famous investments in his career. Right from GEICO to Coca-Cola, what went on in Warren’s head when he decided to buy the stocks of those companies, the methods that he uses, the overall framework of how he functions is explained in a fairly simple manner. In the book Robert Hagstrom has done a wonderful job and we definitely recommend that you give it a read.
Tweet of the Week
Rahul Mathur is the founder and CEO of BimaPay and posts some excellent tweets about his journey of building a first-generation startup, do check him out on Twitter!