Next IPO company? This investor has answers; What Zomato investors need to watch out for

Hello,

India’s electric vehicles sector is set to get even more competitive as steelmaker JSW plans to launch its own EV brand.

Managing Director Sajjan Jindal told the Financial Times that JSW’s planned car plant in Aurangabad in Maharashtra would be devoted to its own brand. “We want to manufacture the products in India, value-add in India and sell in India,” he said. 

Meanwhile, Bhavish Aggarwal-led Ola Electric’s shares fell 5% in early trade on Monday after the EV maker reported a 30% decline in month-on-month sales numbers, according to data on Vahan. The share price later recovered on news of the company’s plans to open 4,000 new stores and closed the day at Rs 93.29 apiece. 

Moving on, three EV makers—Hero Electric Vehicles, Benling India Energy and Technology, and Okinawa Autotech Internationall—are reportedly under investigation for fraudulently availing government subsidies totalling $35 million.

In other news, talks on curbing plastic pollution have hit a dead-end.

More than 200 nations met in South Korea to discuss the future of plastic. However, the final round of the two-year-long discussion fell apart on Sunday after oil-producing nations said no to phasing out plastic. The goal should be “to end plastic pollution, not plastic itself,” Kuwait negotiators said, arguing plastic “has brought immense benefit to societies worldwide.” 

Lastly, here are five everyday plastic items choking the planet. 

In today’s newsletter, we will talk about 

• Prosus on potential IPO candidates
• What Zomato investors need to watch out for
• Using robotics to regain autonomy 

Here’s your trivia for today: Under which title was Agatha Christie's Murder on the Orient Express first published in the US?

Investor

Prosus on potential IPO candidates

Netherlands-based investor Prosus sees fintech giant PayU, affordable ecommerce platform Meesho and omnichannel jewellery retailer Bluestone as potential IPO candidates for the next 18 months. 

According to an investor presentation, Prosus sees edtech player Eruditus, fintech firm Mintifi, export-focused meat startup Captain Fresh, home loan provider Vastu Housing and D2C house of brands player Mensa Brands with “future potential”.

Earnings highlights:

• Prosus-owned PayU India notched a 12% YoY revenue growth in H1 FY25, driven by increased payment volumes and merchant onboarding. This growth was supported by a 25% YoY increase in total payment volume.
• Edtech unicorn Eruditus stands out as the only major edtech investment delivering positive returns for Netherlands-based Prosus, as highlighted in its H1 FY25 financial results.
• Swiggy posted a 40% growth in its revenue to $750 million in the first half of 2024 from $536 million in the first half of the previous year, according to half-yearly disclosures filed by one of its largest investors, Prosus. 

Funding Alert

Startup: Vastu Housing Finance Corp

Amount: $100M

Round: Equity

Startup: Mintify

Amount: $80M

Round: Equity

Startup: AdvantageClub.ai

Amount: $4M

Round: Equity

Foodtech

What Zomato investors need to watch out for

After its Rs 8,500 crore QIP and entry on Sensex, there is a lot of exuberance around Zomato. However, Capitalmind’s Founder and CEO Deepak Shenoy, asked investors to be cautious about Zomato, saying that the company is already richly valued and that it would need consistent high-level growth to justify its valuation. 

“So for year one it will look good,” said Shenoy. “I think the earnings growth will come just because of other income."

Key takeaways:

• Shenoy said that Zomato’s profitability is likely to improve again significantly in the short term following the QIP as returns from the raised capital, which it would get by investing in fixed income, will likely jump by Rs 500 crore annually.
• “Right now, the price-to-earnings (P/E ratio) is roughly 300X earnings today,” said Shenoy. “Earnings from interest income is about Rs 700 crore. That will likely increase by Rs 400 crore because the cash reserves will increase by Rs 8,500 crore because of the QIP.”
• “In retail operations, a large part of the optimisation processes have a lot of losses in the inventory part of the mechanism,” said Shenoy. “You over-order something and you under-order something else, you will have inventory holding costs. This is not visible on Zomato’s balance sheet because they don’t officially own any of these entities.”

Startup

Using robotics to regain autonomy

Millions of people suffer globally from motor function loss due to conditions such as stroke, cerebral palsy, ageing, accidents, and other factors. To address this issue, 21-year-old Sivasanthosh A launched the robotics startup Subtlebotic earlier this year. 

The startup’s flagship product is Limb Assist—a lightweight, external wearable motor system designed to restore limb mobility for individuals who have lost motor functions.

Helping hand:

• Limb Assist is designed to benefit individuals facing motor impairments caused by stroke, spinal cord injuries, cerebral palsy, Parkinson’s disease, and traumatic Injuries. It focuses on providing support to the fingers for fine motor functions.
• For those who are unable to move their fingers entirely, Limb Assist interprets brain signals or alternate nerve pathways, enabling robotic-assisted finger movements for tasks such as holding objects, writing, and operating devices.
• Subtebotic is gearing up for the commercial launch of Limb Assist within 6 to 12 months, at a price of Rs 35,000 to Rs 45,000. “Our focus is on gathering user feedback to perfect the product before full-scale commercialisation,” says Sivasanthosh.

News & updates

• Delivery race: Chinese automakers BYD, Leapmotor, and Xiaomi have raced past their annual delivery targets a month ahead of schedule, underscoring their rapid growth and strong market demand as the year comes to a close.
• Blockbusters: New Hollywood releases Moana 2, Wicked, and Gladiator II provided a big boost to the US box office. The three blockbusters led the five-day opening weekend record to soar past 2018’s record $315.6 million, pulling in an estimated $420 million as of Sunday.
• Struggling icon: Intel Chief Executive Pat Gelsinger has stepped down less than four years after taking the helm of the company, handing control to two lieutenants as the faltering American chipmaking icon searches for a permanent replacement.

Under which title was Agatha Christie's ‘Murder on the Orient Express’ first published in the US?

Answer: Murder on the Calais Coach.

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