The Week That Was: 13-17 July
This week, we wrote about newspapers, cars, Google, Reliance and the covid-19 situation in India. Here are snippets and links in case you missed any of our editions.
So many journalists and media people in India are getting the sack in the wake of the pandemic that the aforementioned journalist Cyril Sam has set up an online form to collect information about people being sacked. Sam has been summarising the results of his research in another Medium post, which continues to be a “live article” (does this not make you wonder why Indian newspapers don’t really do too many “live articles”?).
It is a rather long list of people being sacked and editions being cut. For example, the Business Standard, which both of us read, has done away with its (hitherto excellent) Saturday supplement, and the entire Sunday edition. These are not token sackings to cut costs marginally. Entire teams are being cut, and some newspapers are sacking enough people to lead to social media campaigns.
It is also important to note that the $10 billion will be invested “over the next five to seven years” (this is a clever marketing tactic primarily used by American sports teams to make numbers seem larger than they really are).
That comes to an average of $1.4-2 billion a year. Compared to Google’s 2019 global revenue of $160 billion, the number is not large, especially for a market that it considers to be a future big opportunity.
In the half empty tank, you have the Society of Indian Automobile Manufacturers (SIAM), an industry body which has demanded a (Goods and Services) tax cut for the auto sector.
Car sales in the April-June quarter were 78% down from last year (not unexpected - there was a stringent nationwide lockdown in April which only got marginally relaxed in May and June). In June alone (when the lockdown was least stringent), sales were down 50% compared to last year (this is the month where electricity and fuel demand were 90% of last year).
Google’s investment in Jio Platforms was confirmed in the AGM. Google is putting in $4.5 billion (more than the $4 billion rumoured earlier) into Jio Platforms for a 7.7% stake. This values Jio Platforms at $58.4 billion. Remember that in April, Facebook had invested $5.7 billion for a 9.99% stake (valuation of $57 billion).
The valuation is interesting, for the slew of financial investors that Jio gathered between the Facebook and Google deals all invested at a higher valuation (around $64 billion). Hardware company-backed funds that have invested in Jio Platforms such as Qualcomm Ventures and Intel Capital also invested at the higher valuation ($64 billion).
The real estate sector has already started seeing an impact thanks to the pandemic. As companies have started getting used to remote work that the pandemic forced upon them, they are cutting down their use of office space. Interestingly, banks are among the institutions looking to cut real estate expenses.
Housing Development Finance Corp. Ltd (HDFC), India’s top mortgage lender, has asked regional managers to renegotiate rental contracts with their respective landlords, said a person familiar with the matter, requesting anonymity.