Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy Monday, folks!

Today we’re diving into -
- Tata’s $1 billion fundraise for it’s super-app Neu,
- Paytm’s push on lending with Jio’s looming threat,
- And, Adani’s jazzed up debt metrics.

Our read time today is 4 minutes and 52 seconds - faster than Imran, Kabir and Arjun made it to Spain. 🐂

Let's dive in. 👇

Market Vibe Check

Tata steams ahead with it’s super-app dreams. 📱

TLDR -
- Tata is raising $1bn for it’s super-app Neu, right after a $2bn raise earlier this year.
- They did $25m of revenue against $165m of losses last year - spending almost $7 to earn $1.
- They’re making a classic flush-with-cash play: lure users in with incentives, keep them there with convenience.

Even Tata wants to keep up with the Joneses…

Tata Group is raising $1 billion for their super-app Tata Neu.

Super-app businesses (read: Gojek, Uber, Careem) are notoriously cash-hungry, which means that they’re do or die.

Last year, to generate each dollar of revenue from the super-app, Tata had to burn $6.6. This is expensive, but here is some great stuff that comes out of it -

- Tata builds a very sticky customer base. Their repeat order rates are over 60%, which is unheard of in the business.
- A push into financial services. Tata’s created Fintech, Payments, and Stockbroking subsidiaries. They can ship a product to millions “overnight”, and can also tailor products based on customers’ transaction history.
- Commission income. Tata gets a nice slice of all the income they generate for the businesses on their app (BigBasket, 1mg, Croma, etc). Makes for a very good revenue stream that keeps coming back because of how good their ecosystem is.

Last year, while their losses went up 23%, their revenue went up 13X - growth like this is exactly what they’re spending big bucks for.

They’re enjoying a lot of growth on the parent company’s bankroll… 🥳

Paytm doubles down on merchant lending. 💸

TLDR -
- Paytm’s merchant base went up 15% last quarter, from 8m → 9.2m
- Their goal is to build a wide network of stores, then cross-sell them targeted financial products.
- Good to see them fighting this hard despite competition from Jio/Google and the likes.

Lage raho Munna bhai…

Despite the entry of Jio Financial, Google Pay, and many more heavyweights, Paytm is unfazed.

They’re going full steam ahead with their plan to become the merchant lending king of India.

A quick refresher on what Paytm’s dreams are -
- Get lots of merchants/shop-owners/stores to use their payment machines
- Track all their transaction history, revenues, volumes, etc
- Use this data to sell them tailored loans
- Sit back and enjoy the wonders of compounding

And they’re walking the talk like no one else is.

Last quarter alone, they added over 1.2 million new stores to their merchant base - a jump of 15% from the quarter before.

They currently have a merchant base of 9.2 million, growing quicker and quicker each day.

If they dominate the acquiring-side dhandha, then they’re virtually set, since that business will generate all the cash needed to make other bold bets that they can’t make otherwise.

Crazy stuff.

Adani refinances one of Asia’s biggest loans and eases investor tension. 😅

Adani just posted record profit numbers on their infrastructure + renewable energy businesses - hitting a $12.5 billion run rate.

They also just refinanced a $3.5 billion funding package which they used to purchase Ambuja & ACC.

This is gonna save them $300m/year and will be probably priced at LIBOR +4/4.5%.

Everyone who bet on them during their lows has doubled their money if not more.

In other news… ☕

Alibaba and Tencent pour $341mn into China’s ChatGPT competitor Zhipu (CNBC)

Mumbai real estate surges even more (Mint)

$13.4bn fintech Plaid hires it’s first CFO en-route to IPO (TC)

Toyota nears a big milestone of mass-produced solid-state-batteries (FT)

Uber starts offering hot air balloon rides (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