Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy morning folks. Hope life is good.

Today we’re diving into -
- Adani’s plans to glitz-ify Dharavi,
- The numbers behind India’s cricket world cup,
- And some shady shadow banking tactics.

Our read time today is 4 minutes and 50 seconds - faster than the Shami Express took revenge for 2019’s run out. 🙈

Let's dive in. 👇

Market Vibe Check

Adani starts work on redeveloping Dharavi. 🛖

Inside Bombay’s beating heart lies the world’s most famous slum - Dharavi.

Last year, India’s richest man Gautam Adani won a bid to give the area a makeover.

He paid over $630mn to the government, and he’ll also be spending $3 billion of his own money to transform the slum area into something new and jazzy.

This “bid process” is a BIG reason behind why Bombay’s urban land is a mélange of the rich and poor.

Say the government owns 100 acres of slum land, which sell to the highest bidder. The developers are gonna build permanent housing for the slum-dwellers on 30 acres of it (as they are legally bound to), and then they’ll use the remaining 70 acres to build ultra-luxury shopping malls, buildings, and offices.

Adani’s plans with Dharavi’s development are still very vague. No public information has been released on what he wants to do, but any sane developer would turn this into a hi-fi utopia.

Dharavi lies right next to BKC and is spread over 620 acres of super-prime real estate. Locals know the value of this land, but are also concerned that Adani might shunt them into tiny apartments to save costs, while spending large on the luxury developments which he’s planning to construct.

Crazy stuff, and time will tell where Motabhai takes this.

Cricket World Cup set to add $2.6bn to India’s economy. 💸

In India, cricket is no less than religion.

And the same way it pays well to be a “baba”, it also pays well to control India’s cricket dollars.

The Cricket World Cup is set to boost India’s economy by a crazy $2.6bn. It’s also coinciding with Diwali and the festive season, which means that spending is likely to be very elastic.

Global giants already spent $4-5k per second to advertise on cricket world cup games, which is a pretty high number given that most of the watchers are based in India - a relatively low CPM market.

This growing spotlight on cricket as a sport is a very interesting trend, especially since most formats of the game are relatively unviable to be turned into a “franchise.”

The first folks to realise the insane potential of cricket as a monetisable sport were Lalit Modi & his IPL - which turned an otherwise boring & long game into short bursts of Bollywood glam. Before you know it, you have a franchise that commands $15.1mn of ad sales per MATCH.

Insane trajectory…

India’s largest shadow bank gets told to slow things down. 🤔

Investors have been jumping into India’s shadow banking sector for a LONG while now.

Shadow banks are offer similar services to regular incumbent banks, they just aren’t regulated the same way.

Consumer demand for credit has been spiraling to higher and higher levels and borrowing has been rapidly increasing - which are both relatively new trends.

India’s Reserve Bank is very cautious of new stuff like this, and they’ve decided to ban a few of the offerings that Bajaj Finance (India’s largest shadow bank) has in the market.

The caution is worth a few millions lost in lending because of what happened in 2018 - a lot of India’s state banks were sucked into a non-performing debt crisis due to a glut of lending to infra/development projects that were all smoke and mirrors.

Shadow banks are popular because they often lend to people that normal banks wouldn’t lend to - and that means they operate in a market which lets them charge crazy interest rates.

Greed isn’t always good…

In other news… ☕

Microsoft hits rebrand and changes “Bing Chat” to “Copilot” (TC)

New York sues PepsiCo for plastic pollution (FT)

Red Bull’s F1 dominance seems to be boosting energy drink sales (CNBC)

Davidson Kempner hands Aakash’s stake to Manish Pai with a 75% profit (Arc)

Pakistan wins a $700mn payout approval from IMF (BBG)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it. Have a mauj-masti filled day.

Lots of ❤️,

Team Cutting Chai