Namaste, Sat Sri Akaal, and Salaam. 🫡

Hope life is good and all izz well.

Today we’re diving into -
- the excitement Apple is seeing pan-India,
- Harvard’s idea for a $1.65bn bond sale,
- and PhonePe’s response to Google’s attack on Indian app devs.

Our read time today is 4 minutes and 57 seconds - faster than a pond got stolen in Bihar (this is real 😭)

Let's dive in. 👇

Market Vibe Check

Apple execs are thrilled to see phones fly off shelves pan-India. 📱

TLDR -
- Apple saw India revenues jump 45% with iPhone sales topping 9.2m units.
- India iPhone revenues alone are greater than ALL European markets.
- The losses they’re suffering from Chinese demand destruction are yet to be covered for, and abhi ke liye Dilli door hai.

For the last 2 years, Apple has been making slow yet steady bets in India. One-off stores in shopping complexes, small manufacturing facilities, remote software teams - and so on.

Yesterday was the first windfall gain that Apple received on these bets.

Their India revenue surged ~45% to a stunning $8.7bn with their overall iPhone shipments jumping a similar amount to 9.2 million units.

This makes India Apple’s 5th largest market in just their 2nd year of full-fledged operations, leaving the Indian iPhone market alone bigger than that of every single European country.

A steep drop in Chinese demand has been leaving a multibillion dollar hole in Apple’s income statement, and while all this excitement in India is great, there are still quite a few years left to go until India’s profits can outweigh China’s losses.

Apple thinks that they can top ~$41bn of India revenue over the next decade - an annual clip of 25%.

If there is one thing to take away from Apple’s decision making, it is that any business/brand which bridges the gap between aspiration and affordability will make a KILLING in India.

As the saying goes, “India is not a poor country, it’s a rich country with many poor people.” Demand for aspirational, ‘luxury’ feeling items is thriving in the top 10%. Crazy stuff.

Harvard attracts ‘insatiable demand’ for a $750mn bond sale. 💸

TLDR -
- Foreign investors and pension funds are lapping up Harvard’s latest $750mn bond sale.
- Their debt is priced at 47bps above similar 10-year Treasuries, an incredibly tight spread even for an AAA rated investment-grade bond.
- Indian universities are looking to copy a similar ‘endowment’ model to snowball their growth.

“Harvard is a tax-free hedge fund with an education side hustle.”

This statement has intrigued many and has become one of the reasons for Harvard’s sheer dominance in terms of ‘brand value’ amongst all of the world’s top universities, and they’re out

Harvard is hunting for people to buy $750mn in AAA-rated bonds from them, mainly targeting foreign investors and pension funds. In fact, a few Harvard bonds have even been rolled up into corporate bond indices.

There is apparently “insatiable demand” for investment products coming from premier names in the higher education industry, and bankers working on selling these bonds have added that “it went extremely well” with clients.

A debt raise as big as this also allays any concerns that Harvard is ‘doomed,’ after scrutiny from lawmakers, students, and donors left a dark grey cloud hanging over a lot of prospective students’ heads.

Now here’s the thing: Harvard is ‘Harvard’ because of it’s endowment. They’re virtually a hedge fund who also happen to have a university, and this is a model that Indian universities are starting to replicate.

There has only very recently been action surrounding the ‘finance’ part of running a great university: with IIT Delhi finally raising a corpus of $42mn and hunting for follow-on investments. To keep step with the times, they’ve started accepting stocks and shares as donations, with the lofty target of hitting $1 billion in funds by 2030.

Probably the finest version of an ‘American education’ in India is delivered through Ashoka University - who are actively raising $500mn to fund their higher education. Ashoka is still pretty small, with around 2,600 students - far below the ‘critical mass’ point of 6,000-8,000 students where the network effects start bringing in money from each student class, but it’ll take some time to get there.

Amazing times to live in. 🫡

PhonePe tries breaking Google’s monopoly on the Play Store. 🤔

TLDR -
- PhonePe is going ham with their “Indus App Store” for India.
- It’s meant to be more developer friendly given how many apps Google murdered overnight, so no weird fees or crazy commissions.
- If devs boycott Google (which is obviously difficult since Android owns Indian phones), this could be a multi-billion $ business.

Google/Apple hold a massive monopoly on the “app store” market - and developers HATE it.

You have to fork over 30% “commission” on in-app purchases, a fee when you publish your first app, and tons more in generally nonsensical charges.

PhonePe has seen this and raised the stakes - they've just launched an app store that -
- doesn’t charge any listing fees
- doesn’t levy a commission on in-app purchases
- has a flat-fee model after the first year

Plus, PhonePe has partnered with phonemakers to make distribution a breeze (since a lot of Indian phones have junk processing power) and localize the platform depending on region.

This is pretty crazy - because PhonePe has been a fintech company for 100% of it’s lifespan. They already have 450 million users active on their platform and are now using the power of distribution to 10X their dhandha. Insane numbers…

In other news… ☕

New York Community Bank stock nosedives 40% after some news of a much-needed cash infusion (CNN)

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

OpenAI dismisses ALL of Elon Musk’s legal claims (TC)

IMF agrees to double Egypt’s rescue program to $8 billion (BBG)

America’s consumer protection board caps late credit card fees at $8 (NYT)

And that’s the tea the chai for today.

Thanks for reading, and we hope you enjoyed it.

Lots of ❤️,

Team CC