| | | Question of the Week Prem Watsa, the Canadian-Indian billionaire, set up his Fairfax group in 1985. Which legendary investor has been his idol? | | |  | Here's a great value proposition A digital subscription to Mint premium can be yours at just ₹213 per month. Check out the convenient and affordable plans we have for you here. | | Good Morning | | The News in Summary Disenchanted shareholders of Life Insurance Corp. of India may get a boost if the insurer plans to transfer $22 billion into a special fund earmarked to pay dividends or issue bonus shares. Meanwhile, to meet the fierce competition from other e-commerce heavyweights like Amazon and Jio as well as startups like Meesho, Walmart is looking to draw another $2-3 billion into Flipkart, which it acquired in 2018. Elsewhere, the country’s leading airline IndiGo is facing headwinds leading to a slippage in the punctuality of its flights, while FMCG major Dabur picked up a 51% stake in spices brand Badshah, continuing a recent spree of acquisitions in the foods business. By contrast, Prem Watsa’s Fairfax decided to sell its 54% stake in Bangalore International Airport Ltd, reversing an earlier plan to list the business. | | |  | | | | Some Hope for Disappointed LIC Shareholders State-controlled Life Insurance Corp of India plans to transfer nearly $22 billion from policyholders’ funds into a fund earmarked to pay dividends or issue bonus shares to boost flagging investor confidence. The amount is a sixth of the money lying in its non-participating fund, which can be transferred to shareholders’ fund with approval from LIC’s board, though that is yet to be sought, Startups like Paytm and PolicyBazar that listed over the past year have copped most of the flak for the precipitous fall in their share price. But the biggest disappointment has been the insurance behemoth LIC, whose shares have dropped nearly 35% since its May listing. The plan will bring relief to its shareholders, especially retail investors. | | | | Walmart Looks to Raise More Money for Flipkart Four years after it paid $16 billion for a 77% stake in Indian e-commerce startup Flipkart, Walmart Inc. is considering raising another $2-3 billion for the venture to face the growing challenge of aggressive and well-funded rivals like Amazon India, Reliance Industries’ Jio Mart and the Tata group. The US MNC is looking at both strategic investors as well as pure-play investment firms for fundraising at its current valuation of more than $40 billion and may dilute up to 7% of its current 72% stake for the purpose. Flipkart last raised around $3.6 billion in July last year from a clutch of investors led by Canada Pension Plan Investment Board, the Singapore government’s sovereign wealth fund GIC, Japan’s SoftBank Vision Fund 2 and Walmart. Despite investing billions in the country, Walmart hasn’t yet achieved commensurate success, with the latest reports suggesting that Bengaluru-based Meesho, backed by Meta, is winning more new shoppers in India than either Flipkart or Amazon.com Inc. Though revenues have grown, Flipkart’s net loss widened 51% to Rs 4,362 crore during the fiscal year 2021-22 due to rising transportation, marketing and legal expenses. | | | _1666172422239.jpg) | | | | | | | | IndiGo Slips as Flights Get Delayed Even as the airline industry is pulling out of the pandemic-induced slowdown, Indian market leaderIndiGo has another major problem on its hands. Monthly data released by the Directorate General of Civil Aviation shows that it is lagging rivals Vistara, AirAsia India and Air India, all part of the Tata group stable, in terms of punctuality. Through February and March, IndiGo was the most punctual airline in the domestic market, with 95.4% and 93.9% of its flights reaching destinations on time. Since then, its performance has slipped to 84.1%, well below Vistara’s 91%. Its extensive fleet, the biggest in the country, and the fact that it has maximum connectivity with constrained airports such as Delhi and Mumbai, make IndiGo’s job more difficult as compared to that of smaller airlines. But having been the most punctual airline in 10 out of 12 months through 2021, IndiGo’s new CEO, Pieter Elbers, will want to address the decline expeditiously. | | |  | | | | Dabur Spices Up Foods Portfolio With Badshah Acquisition Dabur India Ltd became the latest FMCG company to join the acquisitions spree when it bought a 51% stake in Badshah Masala Pvt. Ltd for Rs 587.52 crore. The agreement also gives Dabur the option of buying the balance 49% shareholding in Badshah after five years. The Delhi-based company’s first acquisition in the packaged foods space is its entry vehicle in the branded spices and seasoning market in India which is worth over Rs 25,000 crore and furthers its goal of expanding its foods business to Rs 500 crore in three years. Badshah, which reported sales of Rs 189 crore in FY22, sells more than 50 products in India and overseas markets and has two manufacturing facilities located at Umargam in Gujarat. For Dabur, the acquisition is only the first of many more to come as the company seeks to leverage its war chest of Rs 5,500 crore for this purpose. Analysts, however, have pointed out that its acquisition price for a 51% stake in Badshah is higher than what ITC paid for 100% stake in Sunrise in mid-2020. | | | | As the familiar Badshah masala brand prepares to change hands, here’s a short film that captures its 64-year journey from the time that Jawaharlal Jamnalal Jhaveri set it up in 1958:  | | | | Fairfax Looks to Eject Out of Bangalore Airport In a major departure from its earlier plan to list its flagship airports investment firm Anchorage Infrastructure Investment Holding Ltd, the Prem Watsa-controlled Fairfax Group is now looking to offload its entire 54% stake in Bangalore International Airport Ltd (BIAL) for at least $1.5 billion. The stake sale plan appears to be in line with Fairfax’s larger India consolidation strategy, with the group selling its holdings in other Indian firms over the past year. The exit from BIAL, though, will be its largest in India. Fairfax became the controlling shareholder in BIAL when it bought a 33% stake for $321 million from GVK Power and Infrastructure in 2016. Over the years, it purchased an additional 5% from Zurich Airport and another 10% from GVK when it exited the airport by selling its residual stake to reduce debt. | | | | Last Word Just hours ahead of a court-imposed deadline, Elon Musk closed his much-awaited acquisition of Twitter at a $44 billion price tag which many analysts termed way too steep. A video of the maverick entrepreneur walking into the Twitter reception holding a kitchen sink summed up his bizarre pursuit of a firm which began in April this year with his provocative tweet: “Is Twitter dying”. Now charged with reviving a company that lost $221 million in 2021, Musk isn’t leaving anyone guessing about how he plans to do so. Within hours of his takeover, the company’s CEO, Parag Agrawal, and a whole host of other senior executives were headed for the exit. But he will need to do much more to convince potential advertisers who are concerned about his plans to soften content moderation and what they say are potential conflicts of interest in auto advertising, given that he is chief executive of Tesla Inc. | | Answer to the Question Prem Watsa’s idol was Warren Buffet. Unsurprisingly, the Hyderabad-born entrepreneur has had great success in property, casualty insurance, and reinsurance interests worldwide. | | | Do you have any questions? Send in your queries to sundeepkkhanna@gmail.com Were you forwarded this email? Did you stumble upon it online? Sign up here. | Please share your feedback with us What do you think about this newsletter? | | Written by Sundeep Khanna. Edited by Saikat Chatterjee. Produced by Samiksha Khanna. 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