Makin the Dough

Show Me The Money

The Central Government announced plans to raise Rs 6 lakh crore over the next four years under its asset monetization pipeline. Big numbers, lots of complicated words. But what does it mean? 🤔

Simply put, the government is leasing out its under-utilized assets. Note, that it won’t sell any of its assets. The assets will be leased out for a fixed period after which they will be returned back to the Government. The top three sectors identified for asset monetization aka leasing are railways, airports, and coal mining. Roads, power transmission lines, and gas pipeline assets will also be a part of the plan. 💰

Why is the government doing this? The government has spent large sums of money to support the economy during the Covid-19 pandemic. While expenses have shot up, taxes and divestment, the primary income streams, have remained flat. To fulfill the cash crunch and to boost private investment, the government has come up with this scheme. 🤑 Here’s a detailed breakup by Business Standard.

This is good news for engineering, railway, and infra sector companies. Shares of IRB Infrastructure, NCC, and Titagarh Wagons jumped between 6%-10%. 📈 Here are their charts: 

Hungry For More

It’s been exactly a month since Zomato got listed. And yet it feels just like yesterday everyone was debating on why you should avoid the loss-making startup’s IPO. 🤯 Despite all the buzz from both Dalal Street and retail investors, most old-school investors are still skeptical. In that context, it’s always refreshing to see a “bullish AF” report from analysts. 😊

ICICI Securities labeled Zomato a great value stock with a target price of Rs 220. That’s a massive 76% upside from Tuesday’s closing price!!! Here’s what the brokerage firm said: 

Our price target of Rs 220 is counting on 22 million Indians ordering food from Zomato only four times a month in 2024-25. “This is a low bar given that India ‘today’ has around 35 million credit cards and 114 million Paytm transacting users who likely fall in the superuser category. Lower discounts and scaling up complimentary businesses (grocery delivery) can unlock further gains. 

Zomato is still +64% from its issue price of Rs 76 p/sh. 💸 However, the gains have cooled off recently, off 15% from it’s all-time highs. The sell-off is mostly related to the expiry of the 30-day lock-in period for the anchor investors (i.e. those who got IPO allocation). Where will Zomato go next? Let’s see if ICICI is right in calling a good buying opportunity here. Only time will tell. 

Crypto Special

India’s love affair with crypto is just beginning. Crypto investments are up 20x from $200 million to $40 billion in the past year alone. And if all goes well, India might soon surpass the USA to become the largest crypto market in the world. 🥇

We spoke with Nischal Shetty, CEO of WazirX, India’s largest cryptocurrency exchange, to talk about this and more. Here are the edited excerpts:

How will WazirX (owned by Binance) respond to the Enforcement Directorate’s show-cause notice, especially given the recent regulatory attention?
“WazirX complies with all applicable laws. We go beyond our legal obligations by following Know Your Customer (KYC) and Anti-Money Laundering (AML) processes and have always provided information to law enforcement authorities whenever required. We can trace all users on our platform with official identity information. We have cooperated with the agency in the investigation and are preparing a response to the detailed notice we have received on FEMA violations.”

Amid the scrutiny, WazirX is planning to launch a decentralized exchange in India. The critics are saying that this is your plan B to combat the situation. How do you respond?
“WazirX had announced its plans to launch a DEX in August 2020, and we’re pretty close to its launch. Our launch plans have nothing to do with any other external factors.” 

The Finance Ministry of India is looking at all possible options to regulate the crypto industry. How hopeful are you?
“WazirX is a part of the Internet and Mobile Association of India (IAMAI), working on a self-regulatory code of conduct for crypto exchanges in India. We have a draft version ready and are working on updating the guidelines in line with the technology changes in the last few years. This will help curb illegal activities as well as scams. Governments and tech giants around the globe are embracing crypto, and I’m confident that India will not stay behind.”

Your Twitter campaign, #IndiaWantsCrypto, reached the 1,000-day mark, last month. What is the progress so far? 

“Due to the uncertainty and lack of communication, most people believed that crypto is illegal in India. Over time, many people joined this campaign, and it’s been picked up by journalists and influencers globally. 

In these years, WazirX has witnessed 2648% growth in user signups from Tier-II and Tier-III cities of India. In fact, Tier-II and Tier-III cities have driven almost 55% of total user signups on WazirX in 2021. 

A massive percentage of women from Tier-II and Tier-III cities have joined the crypto bandwagon. Women from these regions contribute to 65% of the total signups by women from all over the country.”