The Signal - Patanjali's defence strategy
Patanjali's defence strategyAlso in today’s edition: Paytm’s new bogey; Somali pirates are back; AI optimism for Meta; Nickel overkill
Good morning! Ever wondered how North Korea manages to fund its military projects? Reuters has found an answer. Since there’s no mention of hair products in the international sanctions imposed on North Korea, the country has become a hub for false lashes and other hair products. These are then exported to China for processing and packaging as ‘Made in China’ products, providing the regime with much-needed cash and employment for its people. Now that's a hustle. 🎧 Poonam Pandey takes it too far. Also in today’s edition: Meta's blockbuster earnings. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts. Adarsh Singh and Roshni Nair also contributed to today’s edition. The Market Signal* Stocks & Economy: Indian indices had their best week of 2024, well in the green, buoyed mostly by the global tech rally led by Meta and Amazon announcing their results and domestic IT and energy heavyweights such as Infosys and Reliance gaining substantially. The coming week could see some volatility, with the ongoing Q3 earnings season and all eyes being on the RBI’s monetary policy committee meeting on Thursday. US Federal Reserve chair Jerome Powell set the record straight, saying that it was on course to make three quarter-point rate cuts in 2024, half of what the market expected. But Friday’s better-than-expected jobs report gives the Fed the legroom to hold off on the cuts for now. Asian markets opened the shortened Lunar New Year week with a mixed bag, mostly in anticipation of monetary policy announcements in Australia. China will stabilise its markets after they hit their lowest value since January 2019. The GIFT Nifty opened slightly in the red on Monday. FINTECHPaytm’s Compounding WoesThe Reserve Bank of India’s (RBI) Wednesday order directing Paytm Payments Bank (PPB) to stop most transactions from its products was a culmination of the central bank’s growing concerns over multiple (and repeated) violations by the payments company over a seven-year period. “Serious violations”: The Economic Times reports that the RBI had alerted the Enforcement Directorate about possible money laundering and know-your-customer (KYC) violations at the company. Alleged violations included multiple people using a single PAN to open 1,000+ accounts, besides large funds (to the tune of crores) flowing between multiple non-KYC accounts. In October, the RBI had fined PPB ₹5.4 crore (~$650,000) for non-compliance with several of its guidelines, including KYC. Come to me: Even as Paytm looks to rope in multiple lenders for its payment and settlement backend, the State Bank of India wants a share of Paytm’s 40 million-odd merchants, who are moving elsewhere. SHIPPINGRoute Of The ProblemIf trouble comes in threes, the attacks on freighters by Yemen-based Houthi rebels spells more than trouble. Apart from disrupting trade in one of the world’s busiest shipping routes and pushing an otherwise risk-averse India into troubled international waters, the Red Sea fracas has resurrected a ghost of the past: Somali pirates. Wut?: There have already been three piracy attacks off the Somalian coast in 2024. Somali pirates—suspected to have smuggling links with Yemen—hijacked their first ship in six years in December 2023. Fourth problem: Despite US attempts to persuade China into flexing muscle in the Red Sea (since it has close ties with Houthis-backer Iran), Beijing isn’t acceding. That could be a costly decision though, since most China-EU trade traverses the corridor. Fifth problem: Because tankers must now transit longer, more expensive routes, crude oil has gotten pricier, and import-dependent countries like India are having issues diversifying supply. CORPORATEOf Toothpaste And… Battle Software?
Since 2018, lenders of defence tech firm Rolta India have been trying to sell the bankrupt company for parts. It has been admitted into India’s insolvency court thrice. Now, an unlikely hero has made a late entry: Patanjali Ayurved. Weird deal: The maker of the hit toothpaste brand Dant Kanti and a host of other Ayurvedic products helmed by yoga sensation Baba Ramdev has reportedly made a handsome, all-cash offer of ₹830 crore (~$100 million). Even though bidding is closed and a buyer chosen, lenders are enticed by Patanjali’s superior offer. Why is Patanjali buying a company that was last working on a battlefield management system? According to The Economic Times, it could be for Rolta’s Mumbai real estate or to use its in-house tech to build its OrderMe home delivery app. It’s possible; Patanjali has made crappy apps before.
TECHDecoding Meta’s Monster RallyMark Zuckerberg may have Chinese e-commerce companies—Temu and Shein—to thank for Meta shares gaining 20% and adding a record $197 billion to its market value, capping its 20th birthday. But even as its core advertising business showed recovery and fuelled investor optimism, questions about Meta’s ambitious push into artificial intelligence (AI) remain. Concerns: Meta’s generative AI effort will cost billions of dollars in capex (servers, data centres). Part of its Llama model is open-source, which begs the question: how will it earn substantial revenue? This is unlike Google and Microsoft’s enterprise and consumer cloud and product integrations. Meta’s only revenue case for now is doubling down on integrating AI for advertising products. Confidence: Zuckerberg, however, is betting on Meta’s huge cache of publicly shared user data (images and videos) from across its platforms to train its AI model. That, he believes, could give Meta the edge over OpenAI and Google. ENERGYToo Much Of A Good ThingYou know the nickel glut crisis is acute when even the world’s largest mining company starts reviewing its plans. BHP is weighing the future of its flagship nickel mine in Australia due to an oversupply crisis that’s caused prices of the metal to tank by over 40% from a year ago. Nickel is critical for electric vehicles (EVs). Blame Indonesia: Thanks to Chinese investment and technologies that turn low-grade nickel into high-quality variants, Indonesia now accounts for half of global production. But its nickel boom comes at a serious environmental and human cost. Companies don’t want to spend on ‘green nickel’ because the EV industry is suffering a downturn. While the world grapples with the costs of a green economy transition, the US is raking in the greenbacks as the world’s largest gas supplier, benefiting from a fracking boom, demand from emerging economies, and Europe weaning itself off Russian gas. FYIHighest honour: The Indian government has conferred the Bharat Ratna on India’s former deputy prime minister and Bharatiya Janata Party veteran Lal Krishna Advani. Advani’s nomination follows the bestowing of India’s highest civilian honour to the late former Bihar chief minister Karpoori Thakur. Board games: BYJU’S fired back at a group of investors by stating that they do not have voting rights to seek leadership changes. Elsewhere, its US unit, Byju’s Alpha, filed for Chapter 11 bankruptcy in Delaware. It also cleared January salaries. Delayed: Tata Sons is likely to keep its management teams and boards of Vistara and Air India separate for at least a year, per The Economic Times. The delay is reportedly to allow Air India to earn the same levels of brand trust and reputation as Vistara. Coming home: India will withdraw all its troops from the Maldives by May as part of an agreement reached between the two countries. The withdrawal will happen in two batches, with the first set of troops leaving the island nation by March 10, and the rest by May 10. Fresh deal: Joe Rogan will renew his multiyear podcasting deal with Spotify, now reportedly worth $250 million. It will also not be exclusive to Spotify, i.e. Rogan can distribute his show on other platforms. At last: French football star Kylian Mbappé will depart Paris Saint-Germain (PSG) for Spain’s Real Madrid next season. Mbappé will move as a free agent once his PSG contract expires in June 2023. Coming for Elon: Geespace, a subsidiary of Chinese carmaker Geely, launched 11 low-earth satellites on Saturday. Geespace wants these satellites to support its autonomous cars and other features in existing Geely vehicles. THE DAILY DIGIT35 millionThe estimated number of global cancer diagnoses in 2050, a 77% jump from 2022, when 20 million cases were diagnosed. (World Health Organization) FWIWCulture wars: Mexico’s history of bullfighting is taking a toll on its social fabric. The tradition traces its roots to 1526 and has since witnessed the mushrooming of a national bullfighting organisation and several hundred arenas. However, the allure of bulls fighting each other to death with a crowd of people cheering them on is fading. Increased awareness about animal rights has led to five of Mexico’s 31 states banning bullfighting. Then, the practice was suspended for two years by the courts; only for it to make a comeback this year at La Plaza México, the world’s largest bullfighting arena, where 40,000 people turned up. A classic conservatives vs. progressives fight seems to be in the offing. Drama: Ain’t no drama like a family drama, and the Neumann family drama is proof of that. The family owns an art collection worth $1 billion, which includes the works of Pablo Picasso. However, Dolores Neumann, the estranged wife of family patriarch Hubert Neumann, had her own separate collection worth millions, which she has bequeathed to her second daughter, Belinda. Her other two daughters only got a pittance. That decision has snowballed into a years-long courtroom battle with Hubert and his youngest daughter Melissa, suing Belinda for exerting undue influence on her mother. Ugly truths have come out and the family has had to sell some art from its collection to pay for the legal bills. Sigh… some things never change. Time to change: For the biggest beer brands in the US, it is time to change. All thanks to Athletic Brewing Company. The company makes non-alcoholic beer and has become the highest-selling brand of its kind in the country. So much so that in select retailers like Whole Foods, Athletic Brewing outsells alcoholic beers as well. The company does have increasingly-sober folks to thank. Athletic Brewing doesn’t see itself as a replacement for the real deal, but rather as an addition; as per Athletic Brewing’s own assessment, 80% of its customers still drink alcohol. This is all cool but unless it solves the beer belly problem, we won’t be convinced. The Signal is free today. But if you enjoyed this post, you can tell The Signal that their writing is valuable by pledging a future subscription. You won't be charged unless they enable payments. |
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