Namaste, Sat Sri Akaal, and Salaam. 🫡

Hope aal izz well and you had a great weekend.

Today we’re diving into -
- ADIA’s talks to crack a deal with PocketFM,
- PayTM’s new license + what it means for you,
- and India’s move to slash EV import taxes.

Our read time today is 4 minutes and 43 seconds - faster than trades will be settled given the launch of T+0 🙈

Let's dive in. 👇

Market Vibe Check

India cuts EV import taxes to make life easier for Tesla and Co. ⚡

- Contigent on a $500m investment and sourcing of raw material across India, EV makers might get their 100% tax slashed to just under 15%.
- This is part of a deal to bring electric vehicle companies in and help them get on the ‘India+1’ strategy.
- Most are keen to use India’s cheap labour and exchange rate power to set up an export base for the rest of Asia.

Ever since Elon Musk met with Modi last year, they’ve been itching to pave a way for Tesla’s entry into India’s EV scene. Because as things stand, it doesn’t look like there is much room for a ‘luxury’ foreign electric vehicle brand to succeed.

If you want to purchase a foreign-made car in India, you have to shell out a pretty penny. Say your car of choice retails for 1 Cr. To actually own the car, you’ll end up paying 2 Cr+ after tax, duties, and customs. That’s an effective tax rate of over 100%.

For a company like Tesla, who is intentionally trying to sell to the masses in India, this ‘suicide-by-pricing.’ So to alleviate this pain, the Indian government just set up an investment-linked incentive plan that lets Tesla compete with the rest of the market at a cheaper price.

In short, if Tesla (or any other EV maker for that matter) -
- invests over $500mn into Indian manufacturing,
- sources 25% of raw material locally,
- and does it all within 3 years,

Their tax rate drops from 100% to just under 15%.

In a market as price-sensitive as India, every single dollar matters - and it looks like Elon & Co are gonna be acting fast on this. Tesla will also be launching a sub-$25,000 model (cheaper than its cheapest model globally, which is $32,000) to appease India’s need for a price-first strategy.

Electrifying… 🔋

ADIA tries bagging a deal with PocketFM. 📻

TLDR -
- PocketFM has managed to 6-7X their revenue from $25m/year to over $160m/year.
- ADIA is looking to invest alongside an already-brewing $100mn round from Lightspeed Venture Partners.
- Pretty insane growth from their end - 7X growth in a foreign market in less than a year is no easy feat.

 PocketFM is making a killing by selling the exact same product in the USA and in India - something which is notoriously hard to do.

They run a ‘Spotify clone’ for things like audiobooks, podcasts, and lectures.

Less than 30% of their users come from India, despite their launch being desi and their headquarters being in Gurgaon.

A very underrated but crucial aspect to their business - they own the IP to the most interesting podcasts on their platform. PocketFM has been spending crores perfecting their in-house content strategy and A/B testing the hell out of small things to perfect the user’s experience.

The result?

Something like a Netflix Original’s movie that they own the rights to, but can still earn from by leasing it out to film houses/apps that want to stream it. Plus, the long-term content costs are FAR lower than if they had to pay a license fee every year.

With growth this good, it makes sense that they’re getting a decent few eyeballs on them. ADIA has been speaking to PocketFM for the last month to invest a pretty large amount alongside a ~$100mn cash injection from Lightspeed Venture Partners.

PocketFM is a content creation company which owns the entire tech stack - and when they were last in the market for funds, they were valued at $750mn with $25mn of ARR. As of last month, they’ve got an annual run-rate of over $160mn - which implies over a billion dollars in valuation.

It’s all numbers on paper, but still very impressive.

PayTM gets the license it needs to live another day. 😅

TLDR -
- Paytm just got a license to become a ‘digital payments platform,’ which means that they’ll rely on other banks.
- Their own bank got their license suspended for flouting rules, and were shut down pretty promptly.
- Paytm has vowed no disruption in service for existing clients as they migrate to new banking partners.

You can’t ever mess with Mota bhai - and Paytm unfortunately found this out the hard way after their banking arm got forcibly shut down by the government.

But luckily, they just won approval to become a ‘consumer digital-payments platform,’ which will let them keep operating and will give them the luxury to live another day.

Until now, Paytm has operated under a license connected to its Paytm Payments Bank. PPB isn’t owned by Paytm, but they still control all of Paytm’s digital wallets and traffic. But ever since the government shut PPB down, they had to halt all new deposits.

Paytm has been forced to change their banking partner to Axis Bank, which basically means that they will become a payments platform like PhonePe and Google’s GPay that lean on other banks’ networks.

PPB is all but another company in the corporate graveyard unless government-imposed curbs are lifted - which basically means “it’s over.“

Really sad that a single piece of legislation can completely upend the tireless work of a company this good. As they say, onward and upward.

In other news… ☕

Putin cruises to a record 6 more years in control of Russia (BBG)

LinkedIn plans to add in-app gaming features (TC)

The guy behind ‘Silicon Valley’s largest fraud’ goes on trial (FT)

Kashmir’s Dal Lake hosts an inaugural Formula-4 event (Mint)

Elon Musk gets ready to open source his ‘revolutionary’ AI chatbot Grok (NYT)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC