Navigating The Cryptomaze
Regulations are often two steps behind new businesses. They lagged in e- commerce, the app economy; they are still lagging in social media, fintech, foodtech, edtech — even data privacy. The list is endless. But in case of crypto- currencies, they are hopelessly nine years behind the curve. Over these years, regulators have stayed mute witness to the unbridled growth of an industry without regulations. Then, conflicting actions and statements by the Centre, the Reserve Bank of India and the judiciary have together created a ‘Cryptomaze’ that investors, traders and crypto platforms are forever struggling to decipher. Even as crypto trading in the country has peaked to $500 million (around ` 3,650 crore) daily, there are no answers to whether India will allow crypto- currencies! If yes, in what form, when and how? In our cover story this issue, Avneet Kaur captures the distress, the dilemma and the drama behind India’s ongoing struggle to understand cryptos.
Meanwhile, six listed Adani group companies have seen a meteoric rise in their share price in the past year, propelling group Chairman Gautam Adani to the spot of the second-richest Asian. But the 122 per cent to 819 per cent growth in their share price during January 2020-June 11, 2021 belies the Sensex growth of only 27 per cent in the same period. Nevin John explores how over-valued Adani stocks are vis-a-vis their financial performance and why.
While Adani group’s valuation is under the scanner, the valuation of State Bank of India’s (SBI) very own start-up — an app named YONO ( You Only Need One) — is the cynosure of all eyes. Anand Adhikari uncovers how India’s largest bank SBI has an ace up its sleeve. Riding on the scale of the ` 45.35-lakhcrore parent, in just three years since launch, YONO has put up a sterling performance in lending, transactions and profitability. SBI claims the app alone is valued between ` 2.94 and ` 3.67 lakh crore. That’s not just higher than SBI’s own marketcap (`3.64 lakh crore) but at $40- 50 billion YONO may be valued well north of the great flagbearers of India’s start-up ecosystem —Flipkart ($23 billion) Byju’s ($16.5 billion) and Paytm ($16 billion).
On the infrastructure front, despite best efforts, the government of India and states have just not been able to get the power discoms monkey off their backs. In fact, the two Covid waves so far have worsened the financials of India’s power distribution companies. Centre’s UDAY scheme launched in November 2015 to revive discoms has failed miserably. While financial health of discoms did show some improvement in the first few years due to reduced interest burden, structural reforms needed to help them sustain themselves did not materialise. A new scheme has been announced. Sumant Banerji dives in to look at what works, what doesn’t.
Covid has taken a major toll on the middle class, hurting its ability to spend and consume. FMCG prices have shot through the roof in the past year due to high commodity prices, supply chain disruptions and firms’ desperation to shore up their bottomlines when topline is shrinking. Over 40 per cent of branded FMCG products are now costlier by 20 per cent or more. In case of edible oils, prices have shot up as much as 52 per cent. Where FMCG firms feared higher prices would impact consumption, they secured their margins by reducing weight of the products. Ajita Shashidhar takes you through this disruptive trend in home budgets and FMCG balance sheets.