1.LayOffs in India: 11,000 and counting...
Byjus has laid of 500+ employees, and Udaan has laid off around 180 in a cost-cutting drive. On the other hand Byju’s shopping for Nasdaq-listed firm 2U for acquisition.
Our opinion: Udaan is rumoured preparing for an IPO, and that might lead to more cost cutting in the future.
Building an education company like Byjus is hard. Companies need to validate their customer acquisition costs, value delivered and consumer trust that needs to be built at every step.
2.Nifty Auto Index stays afloat at 12,000
Since October, while the Nifty has corrected around 18.5%, the Nifty Auto Index has been outperforming the broader markets.The auto index continues to trade at the same level when it reached 12,000 levels in October 2021. At present, it is again retesting the 2018 highs. Nifty Auto was in a bear market since 2018 when it reached its previous top at 12,000. The bear trend changed last year when it bottomed out at 4,500 levels. Data suggests that breaking out of its previous high would open gates for another potential rally of around 50% in the index.
Our Opinion: The index is turning out to be the biggest gainer among all sectors, pricing in the expected benefits of falling commodity prices, especially steel and aluminum, the key material for making vehicles. This is easing the cost pressure. Brokerage houses are optimistic about auto stocks on the back of the production-linked incentive (PLI) scheme worth INR26,000 crore for vehicles and component makers coupled with their focus on shifting toward EVs.2.
3. Rupee hits all-time low of 79 against US dollar
The rupee touched 79 for the first time against the US dollar this week, amid weakness in domestic equities as greenback held its ground overseas. The dollar index – which gauges the strength of the greenback against six other currencies – was slightly up at 104.7. Domestic equity benchmarks BSE Sensex and NSE Nifty50 opened lower on Friday. Foreign portfolio investors (FPIs) offloaded Indian shares worth Rs 172.38 crore on Thursday, according to exchange data.
Our Opinion: Global oil prices edged higher on Friday after OPEC+ said it would stick to its planned oil output hikes in August and investors worried about the strength of the global economy. Therefore, Rising oil benchmarks yielded pressure on the domestic currency.
4. SEBI on Thursday slapped penalities worth Rs 1.6 crore
Capital markets regulator Sebi on Thursday slapped penalties totaling Rs 1.6 crore on seven entities, including Kotak Mahindra Trustee Company and managing director of Kotak AMC Nilesh Shah, for flouting rules pertaining to mutual funds while investing in Essel Group companies. According to Sebi, information of Essel promoters not providing additional cover when the margin call triggered and the decision of AMC and trustees to extend the maturity of the securities, all being information having an adverse bearing on the investments of investors were not communicated to the investors when the events took place.In addition, the regulator had restrained Kotak AMC from launching any new fixed-maturity plans for six months
Our Opinion: This has negatively impacted the interests of the investors on account of the infractions on the part of the noticees. The order came after Sebi noticed that the investors of certain FMPs launched by the Kotak Mahindra Mutual Fund were not paid their full proceeds based on the declared NAV of the said schemes as on their respective maturity dates.