Good morning! All these years Denmark was known as the home of toymaker Lego. Lego has also been Denmark's most valuable brand for nine consecutive years. But 2024 might be the last year of Lego’s reign. Who’s the new star? None other than Ozempic-maker Novo Nordisk! Bloomberg reports that in the past year, Novo Nordisk’s brand value skyrocketed by an impressive 59%, reaching $5.1 billion. In contrast, Lego's brand value is about $8 billion, but its growth was a mere 3%. Looks like it’s time Denmark trades building blocks for blockbuster drugs.⚡

🎧 Everything that’s wrong with the Agnipath scheme. Also in today’s episode: India and China’s trade situationship. Tune in to Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.

Roshni Nair, Dinesh Narayanan, and Anup Semwal also contributed to today’s edition.

The Market Signal*

Stocks & Economy: Technology stocks continue to fuel sharp rallies, helping major US indices close at record highs for the fourth day in a row. Cooling inflation and better visibility on the interest rate cycle have pushed investors to take wilder bets. 

With the Reserve Bank rate action out of the way, investors in Indian shares are awaiting the new government’s fiscal policy, to be revealed in what will be finance minister Nirmala Sitharaman’s seventh consecutive Budget. While the direction was already indicated in the interim Budget in February, specific allocations were not spelt out. 

Asian stocks were largely in the red as traders awaited Bank of Japan’s move on interest rates. The central bank is expected to keep rates steady and low while beginning to withdraw monetary stimulus. 

The GIFT Nifty hints at a flat opening for Indian shares.

CORPORATE

Adani Begins A Cement Raid 

The Adani Group is taking a leaf out of roll-up commerce, it seems. It has purchased (pdf) Hyderabad-based Penna Cement for Rs 10,422 crore (~$1.2 billion). The Economic Times reports that it has three more cement producers in its crosshairs. 

Targets: Gujarat’s Saurashtra Cement and Vadraj Cement, and Jaiprakash Associates’ Madhya Pradesh units. The group has reportedly earmarked $3 billion to splurge on them. 

In 2022, Adani spent $10.5 billion to buy Ambuja Cement and ACC, marking its entry into the industry as India embarked on a massive infrastructure expansion. It has a 14% share of the market with a capacity of 79 million tonnes per annum (mtpa), behind only industry leader AV Birla Group’s UltraTech, which has a capacity of 146 mtpa. Adani wants to raise the share to 20% and capacity to 140 mtpa by 2028.

CONSULTING

The More Things Change, The More They Stay The Same

Gauging from his interview with The Wall Street Journal, Bob Sternfels would have you believe that McKinsey is undergoing a radical overhaul. The chief of the consulting major is overseeing a leadership shake-up, change in fee structures, a “partnership modernization task force”, and “communities” dedicated to sectors such as infrastructure. One of the changes includes separating the firm’s senior partners from the board, effective July 1.

But: Like accounting and consulting rival PwC — which is grappling with its own internal machinations — McKinsey has to fight several blazes, such as the US Justice Department’s criminal probe into the role it played in the opioid crisis. Washington also isn’t pleased with its consulting for state-owned enterprises in China and Saudi Arabia. To which Sternfels hints that US regulators will come around to a resolution, and that the Chinese companies it advises are vastly private sector or multinational corporations. ¯\_(ツ)_/¯

POLICY

Indian Army’s Trial By Fire

Recruit temporary soldiers to a professional army, retain only a quarter, abandon the rest with weapons training and little employment.

What could go wrong? 

In just two years, India’s Agnipath scheme is unravelling. The Indian Express reports the armed forces are considering retaining more Agniveers every year and increasing their training period. Instead of the current 25%, up to 75% of all temp recruits and specialist soldiers may get permanent jobs. 

Discontent: Why these changes? In internal surveys, the armed forces found that instead of learning to collaborate, Agniveers are competing with each other to get a permanent job. Armed forces can’t survive in the absence of trust. Besides, the forces want to extend Agniveers’ tenure to seven years, making them eligible for gratuity and ex-servicemen status. 

People wanted: Since recruitment was suspended during the pandemic, the armed forces are facing a severe manpower shortage. Their intake of soldiers under Agnipath is far below what they need, prompting panic and resentment among top-ranked officers and crucial army units such as the infantry and the Nepal-based Gorkha regiment. 

The Signal 

The benefits of the Agnipath scheme are clear — less permanent recruitment helps the government slash its wages and pensions budget, the biggest expenditure for the Defence Ministry. But this pursuit of budget cuts is decimating India’s once-venerated armed forces which desperately need more recruits even as young Indians desperately need good quality jobs. 

But will the government allow changes to its pet scheme? It may not be easy for top officers to even argue their point from a position of strength. Consider this: at PM Modi’s swearing-in last week, India’s current chief of defence and chief of army staff were purportedly seated much behind Mukesh Ambani and Shah Rukh Khan. 

FYI

Old team back in PMO: The government has reappointed Ajit Doval as the National Security Adviser and PK Mishra as Principal Secretary to the Prime Minister. Amit Khare and Tarun Kapoor also return as the PM’s advisers.

Pay in kind: Vodafone Idea will offer shares worth Rs 2,458 crore to vendors Nokia and Ericsson in lieu of pending payments.

Fat pay: Tesla shareholders have approved chief Elon Musk’s $56 billion remuneration as well as moving the company’s base to Texas.

Parity please: Apple has been slapped with a class action lawsuit for systematically underpaying over 12,000 women employees in its engineering, AppleCare, and marketing divisions.

Money in the bank: Indian beauty startup Renee Cosmetics has raised Rs 100 crore at a valuation of Rs 1,200-1,400 crore in a Series B round led by Edelweiss Group and Evolvence India.

THE DAILY DIGIT

500

The number of driverless taxis Chinese tech firm Baidu is testing in the city of Wuhan. China is testing more autonomous cars than any other country in the world. (The New York Times) 

FWIW

Big Brother is counting…: how many minutes you’ve been holed up inside the loo. No kidding. The restrooms in China’s Yungang Buddhist Grottoes are now equipped with shiny new toilet timers. When no one’s inside, the LED screen displays “empty” in green; otherwise, it flashes to those in line how many minutes and seconds you’ve been holding the fort. What’s the grand motivation? The Yungang caves are one of China's busiest tourist sites, but the authorities say there are no time limits and no question of kicking users out of toilet cubicles. Maybe then it's a ploy for shaming those who kill time scrolling videos inside the toilets. Workplace managers, don’t get any ideas, please.