Namaste, Sat Sri Akaal, and Salaam. 🫡

Hope life is good and aal izz well.

Today we’re diving into -
- BYD’s bet on India’s burgeoning upper-middle class,
- the $15bn of semiconductor plants that just received a governmental nod,
- and Sony’s decision to abandon their $10bn merger with Zee TV.

Our read time today is 4 minutes and 52 seconds - faster than Anant Ambani can buy a new Richard Mille…

Let's dive in. 👇

Market Vibe Check

BYD drops a $50k sedan in a bid to appeal to India’s fast-growing upper-middle class. ⚡

TLDR -
- BYD just launched their 3rd premium EV offering in India, a premium sedan starting at 40L.
- They sell to affluent, aspirational consumers in a fast-growing market: over 1.5mn EVs were sold in India last year.
- BYD also wants to set up base, but they need to be wary of an anti-China sentiment that’s been getting popular of late.

BYD was a little-known Buffett-backed EV company until it started giving Tesla a run for it’s money in key international markets - and it looks like they’re out for blood in India too.

They just launched their 3rd vehicle, a luxury electric sedan which is priced pretty aptly for the Indian market at just around $49k, or 40L INR. All of BYD’s Indian offerings are priced above the $35k/30L mark which is pretty interesting, as they’re able to push sales up month-on-month and retain such pricing power.

But this sudden interest in India goes beyond the consumer demand side - BYD wants to put some roots down and invest in a solid production backend too.

They can make & manufacture in India (their 2nd biggest Asian market after China) and sell with no tax locally, and they can also save a ton on shipping/regulatory costs by using India as an export base.

Attitudes toward EVs are fast-changing too, as the Indian government has set (incredibly ambitious) 2030 targets of -
- 30% EV adoption for private cars
- 70% EV adoption for commercial vehicles
- 80% EV adoption for 2/3 wheelers

BYD’s only fear is probably the ‘Anti-China’ polarisation that’s very popular across India. It’s partly political, but a fair few folks have a preconceived notion that Chinese products are somehow “inferior.” And in a aspirational, word-of-mouth heavy market like India, your brand MATTERS, which is why BYD’s marketing team will definitely be running the corporate card up.

Sony ditches their $10bn merger with Zee. 💔

TLDR -
- Zee and Sony said they’d be merging for $10bn: they’re not anymore.
- Sony is eternally pissed off over Zee CEO Punit Goenka’s fraud cases and standoffish behavior.
- Zee’s revenues dropped 40$

2 years back, Zee and Sony put pen to paper on what was to be a $10 billion mega-merger of India’s entertainment giants. The formed entity would have over 70 TV channels, multiple Bollywood studios, and an enviable film library. But embedded within those legal documents was a clause that set a 2-year deadline for the deal to be closed.

That 2-year clock ticked zero last December, and Sony just called the entire deal off for good. Here’s why. 👇

1 - Turbulence with senior management

Where there is man, there is power. And where there is power, there is kalesh. The kalesh in this merger was between the C-suites of both businesses - Zee wanted their CEO Punit Goenka to lead the merged company, but Sony was wary because of some ‘nepo baby’ behavior, and also the fact that SEBI was investigating him for securities and tax fraud…

2 - Strategic mismatch

The shared goal for both businesses was to build a media company which hogs up some solid share in India’s media market. Zee held 17% market share while Sony had around 10-12%. But Zee also wanted to play the future safely and slowly expand, while Sony wanted to go aggressive with cash-burn to weed out competition, which is quite literally the opposite strategy.

3 - Financial ghaplebaazi

Another thing that set Sony’s alarm bells off about the deal was Zee’s sloppy financial performance. Revenues FELL last year, and EBITDA dropped 40% over jitters from higher content costs

All-in-all, it’s probably for good, because the only people who benefit from messy corporate fallouts are lawyers and bankers. 🤷

Indian government gives a go-ahead to $15bn of planned semiconductor plants. 🏭

India just gave chipmakers another reason to smile (other than higher selling prices) and approved the allocation of $15.2 billion toward semiconductor manufacturing plants.

Oddly enough, none of these facilities will be producing the ‘AI’ area of the chip market, and are instead aiming for more traction from general-purpose buyers.

In 2021, the Indian government announced a $10 billion incentive program to gain the attention of chipmakers and entice their R&D and Finance teams to beg corporate to set up local facilities by offering incentives of up to 50% of sunk costs.

These new units are supposed to generate over 60k indirect jobs and 20k direct ones - so time will tell where this one goes.

In other news… ☕

BTC hits the brakes after crossing $69k and hitting an all-time high (BBG)

US bill mulls a TikTok ban until ByteDance divests their American operations (FT)

Indian ex-UniversalAI employee comes out of stealth with $25mn (TC)

Monzo raises $430mn at a $5bn price tag to go ham in the States (CNBC)

Tesla halts production in Germany over suspected arson (NYT)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC