Namaste, Sat Sri Akaal, and Salaam. 🫡

Happy Monday, folks. 🙏

Today we’re diving into -
- Ather’s down round with Hero Motors,
- Mukesh Ambani’s battle plan to blitz the 2G market,
- And Zerodha’s push into becoming a “fund house”.

Our read time today is 4 minutes and 42 seconds - faster than you can finish an Afghani Malai chaap. 🔥

Let's dive in. 👇

Market Vibe Check

Hero Motors supercharges Ather with a $67mn boost. 💸

TLDR -
- Ather just picked up $67mn from Hero Motocorp.
- Their dhandha has taken a big hit after the government cut their EV subsidy.
- This cash infusion is gonna help them bounce back!

Hero Motocorp just put $67 million more into Ather Energy - India’s fastest-growing EV scooter startup.

Ever since Ather started making scooters, they did it under the government’s FAME scheme - which basically gave EV makers a large subsidy.

That let them sell below market price, which worked brilliantly since India’s market is one of the most price-sensitive in the world.

They were on track to hit over $1 billion in sales by December with tons of more R&D in the pipeline.

But in June, their subsidy got cut, and sales PLUMMETED -
- Jan: 9,226
- Feb: 12,184
- Mar: 15,420
- Jun (subsidy cut on Jun 1): 4,597
- Jul: 6,692
- Aug: 5,092

Ather is gonna use this funding to regain that lost momentum and build up some new backend including a production facility for 1 million+ scooters.

Electric! ⚡

Ambani hunts for a $2-billion loan to fund 5G rollout. 🗼

TLDR -
- Jio is raising $2bn of debt to fund their 5G infra plans.
- This is gonna go toward buying all the tech that they need from Ericsson.
- Biggest two problems - INR depreciation and a LONG list of monetization issues.

Jio is playing a massive 5G game, and they’re putting some money where their mouth is.

Ambani and co. are raising $2 billion from a consortium of banks including BNP Paribas and UBS.

This money is gonna be used to pick up all the 5G cells that Jio needs for their network (primarily from Ericsson) and to fund some other tech infrastructure.

Sounds brilliant, but there are 2 big things that could go wrong.

1 - Rupee depreciation

INR depreciation is the “hidden cost” of living in India - this debt is denominated in USD, so repayments will also be in USD.

The exchange rate weakens 4-7% a year, so that burdens Jio with an effective 4-7% EXTRA interest rate.

2 - Monetization is far out

5G monetisation is AT LEAST one year away.

There are barely any 5G devices on the network and phone makers are only JUST coming out with their 5G enabled models.

These are (obviously) a little more expensive, which means that they sell slower in India’s price-elastic market.

Killer… 🤳

Zerodha files papers for their “passive fund house”. 🤔

Earlier this year, Zerodha tied up in a 70/30 JV with Smallcase to build Zerodha Fund House.

They want to offer low-cost, low-headache investment products for working class Indians.

ZFH just filed their papers to launch 2 passive investment funds.

Tons of giants (Jio Financial, Blackrock, HDFC) are all moving into this segment of no jhanjhat, no stress products - super interesting to see.

In other news… ☕

UAE paves way for billion-dollar casinos. (BBG)

Butternut Box raises $354mn to feed dogs (TC)

Biodiversity research firm warns of a $420 billion “invasive alien” problem (FT)

Tesla full-self-driving prices hit $12k, an all time low (TC)

Novo Nordisk becomes Europe’s most valuable business (FT)

And that’s the tea the chai for today.

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

Lots of ❤️,

Team Cutting Chai