1)

Elon Musk Challenges Twitter’s CEO for a Public Debate  

Elon Musk has thrown an open challenge to Twitter CEO Parag Agrawal to have a public debate over the issue of fake accounts. Tweeting on his Twitter handle, the Tesla CEO further said that if Agrawal is able to prove during the public debate that fake accounts on Twitter constitute not more than 5% then he will go ahead and buy the company on the original terms. Agrawal has still not responded to Musk’s open challenge. Irrespective of whether this public debate takes place or not, Musk will have to fight a legal battle against Twitter in the courtroom. The much-anticipated legal battle is all set to start in October this year.

2)

Binance cut ties with Wazrix after money laundering charges

The world’s largest crypto exchange Binance has categorically said that it does not own crypto exchange company Wazrix. Binance’s CEO said on Twitter that Wazrix shares were never transferred to the company and nor does Binance has any control over the day-to-day operations of Wazrix. Binance has further stated in its official blog that the 2019 agreement was only meant to acquire Wazrix’s certain ‘assets’ and ‘intellectual property’ and not the entire company. This surprising disclosure comes in the wake of an ongoing ED investigation against Wazrix over money laundering charges. It now appears that Binance wants to distance itself from Wazrix due to ongoing money laundering investigation.

3)

Paytm’s loss swells by 69% in 1^st Quarter

India’s largest digital payment company Paytm clocked a loss of over Rs 600 crore in the 1^st quarter of FY22, which is nearly 69% increase on a year-on-year basis. Although Paytm saw a quantum jump in its loss on account of higher expenses, its revenue grew by an impressive 89% on a year-on-year basis and clocked a consolidated revenue of Rs 1,679 crore during the 1^st quarter. Despite clocking a loss in the first quarter, Paytm’s CEO Vijay Shekhar Sharma said that he is confident that Paytm will achieve operational profitability by September 2023. Paytm’s stocks made debut on the Dalal Street in November last year with much fanfare but its IPO proved to be a disaster.

4)

Apple planning iPhone 14 Production Simultaneously in India and China  

In a first, the tech giant Apple has reportedly planned a simultaneous production of its upcoming iPhone 14 both in its India and Chinese plants. Usually, manufacturing plants based outside China take several months before they are given green to produce new models. If there is any truth in this report then it is pretty clear that India now assumes greater importance in Apple’s manufacturing plan. Apple’s long time manufacturing partner Foxconn is also reportedly planning to set up a chip manufacturing plant in India. All these obviously spells good news for the Indian government’s made-in-India ambition.

5)

Now book an Uber cab directly from WhatsApp

Ride hailing major Uber has struck a partnership with instant messaging platform WhatsApp. Thanks to this partnership, now WhatsApp users in India can directly book an Uber ride from WhatsApp itself. The users need to just drop a request for a ride and a WhatsApp’s chatbot will ask required details for booking a ride. This obviously means that you now don’t have to separately go to the Uber app and book a ride for yourself. However, mind you, this feature is currently in beta testing and is available only in a few pockets of Delhi NCR region. Whatsapp is apparently planning to diversify its features beyond instant chatting. Last year, the platform rolled out the much awaited UPI payment feature.

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Paytm on Friday probably faced its biggest regulatory crackdown since it got listed on the bourses last year. India’s Central Bank, Reserve Bank of India, issued a press release on Friday announcing that it has directed Paytm Payments Bank to stop onboarding new customers from immediate effect. RBI has cited ‘material supervisory’ concerns observed in the bank as the main reason for issuing this directive against Paytm’s banking unit.

The banking regulatory has also asked Paytm Payment Bank to hire an audit firm and conduct an comprehensive audit of its IT system.

According to reports, RBI has already said that it will take steps to revoke the ban only after reviewing Paytm Bank’s IT audit report.

Experts are of the view that it is highly unlikely that RBI must have not sought prior explanation from Paytm Payments Bank over IT discrepancies and its punitive action may have resulted due to latter’s unsatisfactory response.

RBI’s crackdown on Paytm Payment Bank clearly implies that the central bank has concerns about critical matters like data privacy, data storage KYC etc. Notably, the central bank has already made its mandatory for fintech MNCs to have a local data storage in India. In this context, it is worth noting that Alibaba, Softbank and several international VCs still have stake in Paytm.

This regulatory crackdown may have some short term impact on Paytm Bank’s growth plans. On immediate note, RBI’s crackdown will most certainly have negative effect on Paytm’s share price when trading resumes on Monday.

Paytm share price has been on a freefall ever since it got listed on the bourses last year. Listed at an issue price of Rs 2100, today its stocks are trading at paltry price of Rs 776.

However, it must be noted that RBI has equally issued similar directives against established banks including India’s largest private sector bank, HDFC Bank.

In December 2020, RBI barred HDFC from launching new digital products and services including new credit cards unless the bank addresses its recurring IT related issues.

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On Thursday Paytm was officially listed on BSE and NSE and as was expected the listing of Paytm happened at a discounted rate. On NSE, Paytm Shares opened for trading at Rs 1950, marking a decline of nearly 9% or Rs 200 from its issue price of Rs 2150.  The shares continued to plunge during the intra-day trading, plunging as much as 26% to trade nearly at Rs 1,586. Paytm’s listing brings closure to India’s biggest-ever IPO. The IPO was worth Rs 18,300 crore.

The tepid response to Paytm’s debut listing was sort of expected considering that Paytm’s stock price was continuously nosediving in the grey market. Even the overall response of the investors to high-profile IPO was very tepid. Paytm’s IPO had to wait for the last day to get it over-scribed. To put it in more mild words, Paytm’s IPO almost sailed through its IPO.    

Many of Paytm’s big investors like Alibaba and Softbank have made an exit through the IPO.

Experts cited several factors like enormous issue size of Paytm, over-expensive valuation, challenging path to profitability and company’s recurring losses for lackluster response to Paytm’s IPO. The tepid debut of Paytm stands in a very stark contrast to the stellar debut of Naykaa on the bourses.

Paytm’s core business of digital payment, where it is present in both ends of the vertical (B2C & B2B) sees huge competition from other well-funded players including Google Pay and Phonepe. The company over the years has branched into other verticals like stock broking, insurance and wealth management. However, company is not a market leader in any of these verticals and will have to put painstaking efforts to rise to the podium.

Paytm also has another vertical in the form of e-commerce, which today makes negligible contribution to Paytm’s topline. Despite heavy investment, Paytm Mall failed to surmount any real challenge to incumbent leaders Amazon India and Walmart owned Flipkart. Today Paytm Mall sits on the fringe of India’s burgeoning e-commerce industry.    

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Digital payment major Paytm announced on Wednesday that its sister firm, Paytm Insurance ltd, has entered a strategic partnership with Swiss Re. Based in Switzerland’s capital Zurich, Swiss Re is a reinsurance company. In all likelihood, this is Swiss Re’s first ever investment in India. This is also the first big investment by external investor in Paytm Insurance.  

With this strategic partnership, Swiss Re will be investing INR 923 crores through equity shares and CCPS shares. The investment will give Zurich based company 23% stake in Paytm’s insurance unit.

As per the arrangement, Swiss Re will be paying INR 397 Crore upfront while it will make the remaining investment in the upcoming tranche.

Last year in July, Paytm Insurance had acquired 100% stake in the Mumbai based insurance company Raheja QBA.

Paytm’s foray into the insurance space represents its long cherished ambition to become full-stack wealth management company. Today the company is present in literally every important vertical of financial services. Be it insurance, stock-borking, wealth advisory and digital payment. The digital payment is obviously its core business where it is present in both side of the spectrum, B2B as well as B2C.   

India’s insurance market, by the way, is indeed a lucrative market. Compared to other developing and developed countries, insurance penetration in India is still very low. A large quantum of India’s population still remains uninsured. New age insurance companies like Paytm Insurance and Acko insurance are capitalizing on conducive factors like rapid penetration of internet and smartphones to supplement their growth.

Off late,  Paytm has been in news for its much anticipated IPO. Planning to raise whopping 16,600 crore from India’s capital market, the Paytm IPO will be India’s largest ever IPO. Barely two days back, India’s regulatory body SEBI had given green signal to Paytm’s 16,600 crore IPO.  

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