Update: September 6 | 05:30 PM

The EV startup said in a statement on Wednesday it has raised INR 900 Cr from existing shareholders Hero MotoCorp and GIC through a rights issue.

Ather said it would use the fresh funds to launch new products and expand its charging infrastructure and retail network.

The startup claims to have over 200 retail touchpoints across over 100 cities.

“… We have always believed that this (EV) transition will be led by world class technology and products designed and built in India and this year will be no different with our largest outlay on research and development yet, planned in 2023-24. This round will allow us to expand our product portfolio while expanding our footprint,” Ather CEO and cofounder Tarun Mehta said.

Original Copy: September 4 | 11:20 PM

Bengaluru-based EV startup Ather Energy is raising INR 550 Cr from existing investor Hero MotoCorp. 

Hero MotoCorp, in an exchange filing, said it would invest up to INR 550 Cr in Ather via its rights issue by subscribing to the EV startup’s Series E2 compulsory convertible preference shares.

Hero Motorcorp first invested in the EV startup in 2016 and currently holds a 33.1% stake in it. Its shareholding will further increase following the rights issue, which is expected to close by September 30.

The funding round comes almost 11 months after Ather raised $50 Mn from Caladium Investment. Prior to that, it raised $128 Mn from NIIFL and Hero MotoCorp in May last year as part of its Series E round. 

Overall, the startup has raised a total funding of over $400 Mn till date.

Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather is a major player in the Indian two-wheeler EV market. It currently offers two escooters – Ather 450X and Ather 450S.

Ather also claims to have the largest fast-charging network in the country. It has over 1,400+ charging points in over 99 cities, including Delhi, Chennai, Bengaluru, Mumbai, Hyderabad, Jaipur.

Registrations of Ather’s escooters stood at 6,780 units in August, a marginal rise of 1.6% from 6,671 units in July. Its rival Ola Electric’s registrations declined 10.4% month-on-month to 17,331 units in August but it continued to lead the two-wheeler EV space.

Besides Ola Electric, Ather competes with Ampere, Okinawa, Revolt, TVS, among others.

Ather’s revenue stood at INR 1,806 Cr in FY23, a massive jump from INR 408.5 Cr in FY22, as per Hero MotoCorp’s filing. While the filing didn’t mention profit/loss numbers for FY23, Ather’s net loss rose 47% to INR 344 Cr in FY22.

The post [Update] Ather Energy Raises INR 900 Cr From Hero MotoCorp, GIC appeared first on Inc42 Media.

Chinese internet giant Ant Group offloaded a 3.6% stake in fintech giant Paytm on Friday (August 25) for INR 2,037 Cr through open market transactions.

Antfin (Netherlands) Holding B.V. sold 2.27 Cr shares of One97 Communications, the parent of Paytm, for INR 895.2 per share, as per bulk and block deal data of the BSE.

The subsidiary of the Ant Group sold the shares in 14 tranches. Shares of Paytm ended Friday’s trade 0.54% lower at INR 899.30 on the BSE.

Societe Generale, Morgan Stanley Asia Singapore Pte, Citigroup Global Markets Mauritius Private Ltd, BNP Paribas Arbitrage, Goldman Sachs (Singapore) Pte, Motilal Oswal Fund, and Nippon India Mutual Fund, among others, were the buyers of the offloaded Paytm shares.

Antfin (Netherlands) Holding held a 23.79% stake in Paytm at the end of the June 2023 quarter, which declined to 20.21% following Friday’s stake sale, as per Paytm’s shareholding data available with the BSE. 

Earlier this month, Antfin (Netherlands) Holding transferred 6.53 Cr Paytm shares, or 10.3% stake, to the fintech giant’s CEO and founder Vijay Shekhar Sharma’s Resilient Asset Management through an off-market transaction. 

While announcing the transaction, Paytm said it would reduce Antfin’s stake in the company to 13.5% and increase Sharma’s stake to 19.42%. 

The development comes at a time when the government has increased scrutiny of Chinese investments in Indian companies. The Ant Group is an affiliate of Jack Ma’s Alibaba Group.

In February this year, Ant Group’s senior vice-president Douglas Feagin resigned from the Paytm board. In the same month, Alibaba.Com Singapore E-Commerce Private Limited exited Paytm by selling a 3.31% stake.

Amid all these, shares of Paytm have been on an upswing this year due to the company’s improving financial performance and a change in investor sentiment towards new-age tech stocks.

Paytm’s net loss declined nearly 45% year-on-year to INR 358 Cr in the quarter ended June 2023. Operating revenue surged 39% to INR 2,342 Cr on strong growth in payments and lending business. 

A number of brokerages, including Goldman Sachs, Citi, and CLSA, gave a thumbs up to the company’s Q1 performance and a ‘BUY’ rating to the stock. They have also increased their target price. Shares of Paytm closed nearly 70% higher year to date on Friday.

The post Ant Group Ditches 3.6% Paytm Stake For INR 2,037 Cr appeared first on Inc42 Media.

The sell-off in new-age tech stocks continued this week, with most of them reversing last week’s gains and ending in the red zone. 

DroneAcharya, which has seen a sharp rise in its share price since its listing last month, emerged as the biggest loser this week. Despite the shares rising 5% to INR 179.05 on the BSE on Friday, the stock ended the week over 14% lower.

Meanwhile, beauty ecommerce platform Nykaa continued to remain under pressure, with the stock sliding nearly 14%. 

Fintech giant Paytm shed last week’s gain to end the week 1.6% lower. However, many analysts continue to be positive about the stock. Earlier this week, brokerage Goldman Sachs, in a research note, said it expects the Vijay Shekhar Sharma-led company to achieve adjusted EBITDA profitability in the March 2023 quarter, two quarters ahead of its target.

Jigar S Patel, senior manager, technical analyst, at Anand Rathi Shares and Stock Brokers, said, “Paytm has been making higher highs and lower lows for over a month now. The stock is giving a clear buy signal with a target of about INR 585-INR 590.”

Meanwhile, just four out of the 14 stocks under our coverage ended the week higher, with RateGain Travel Technologies emerging as the biggest winner. MapmyIndia, EaseMyTrip and IndiaMART were the other stocks which gained on a weekly basis.

On the other hand, benchmark indices Nifty50 and Sensex ended slightly higher this week in the absence of any major cues. While Nifty50 inched up 0.4% to end Friday’s session at 18,027.65, Sensex rose 0.6% to settle at 60,621.77.

“Technically, on weekly charts, the Nifty has formed a long legged Doji candlestick, which is indicating non-directional activity. For the index, 18,000 or 20-day simple moving average would act as a sacrosanct support zone in the near future. And above the same, it could retest the level of 18,150-18,200. On the flip side, bearish sentiment is likely to accelerate below 18,000 and the index could slip to 17,850,” Amol Athawale, deputy vice-president, technical analyst, at Kotak Securities, said.

Now, let’s analyse the performance of the listed tech stocks from the Indian startup ecosystem.

The 14 new-age tech stocks under our coverage ended the week with a total market capitalisation of $24.62 Bn as against $25.40 Bn last week.

RateGain Biggest Gainer

Continuing its winning streak, RateGain emerged as the biggest gainer among the listed new-age tech stocks for the second consecutive week. 

Shares of the traveltech SaaS startup have been rising since its announcement of the acquisition of data exchange platform Adara for $16.1 Mn (INR 134 Cr) at the beginning of this month. 

Last week, the startup said that it completed the acquisition of Adara. However, its shares continued their upward journey this week as well, rising nearly 7%. The stock rose in four consecutive sessions this week, before declining marginally on Friday.

Earlier this week, RateGain also said that Greek airline SKY express has selected its SaaS solution AirGain to get real-time competitive pricing insights. AirGain provides an intuitive UI and real-time pricing intelligence to commercial teams of airlines to make pricing decisions.

RateGain was listed on the stock exchanges in December 2021, but the global tech sell-off in 2022 resulted in its shares falling more than 23% during the year. However, the shares once again crossed their listing price on the BSE and the NSE this week. 

“RateGain is looking strong on the technical charts. It had a range breakout about two-and-a-half weeks ago and has been rising since then. It is a good buy at this level as the stock can go up to INR 425-INR 430,” Patel said.

Nykaa’s Horror Show Continues

There was no relief for Nykaa this week as well, as its shares continued to fall. After falling 3.6% last week, the beauty ecommerce platform’s shares plunged nearly 14% this week. 

Nykaa was one of the worst hit new-age tech stocks in 2022, with its shares falling over 60%. Besides the global macroeconomic headwinds, the expiry of the lock-in period for its pre-IPO investors in November 2022 also hit Nykaa last year. The trend has continued in 2023 as well, with its major investors offloading a large number of shares. The stock fell in four out of the five sessions this week, hitting a record low of INR 123.30 intraday on Wednesday.

“Nykaa is looking very bearish right now and the stock can fall even further. It is facing historical resistance at INR 140 and any chances of a meaningful rally are likely only after it crosses this level,” Patel said.

However, Nykaa received a shot in the arm this week from positive commentaries by a couple of brokerages. In a research note, HSBC said that the startup’s valuations are even more “appealing” now and under-appreciate the structural growth opportunity in the beauty and personal care (BPC) space. Maintaining a ‘buy’ rating, it adjusted the target price to INR 361.67 for the stock.

Meanwhile, ICICI Securities also upgraded Nykaa to ‘Add’ from ‘Hold’. The brokerage said that Nykaa presents a combination of the largest BPC business in a growth market, good profitability metrics, prudent capital allocation, and is omni-channel in the ‘true sense’ (going online to offline). It has a target price of INR 145 on the stock.

IndiaMART’s Impressive Q3 Show 

Shares of B2B marketplace IndiaMART ended over 2% higher this week, as the startup reported positive numbers for the third quarter of the financial year 2022-23 (FY23).

While shares of IndiaMART rose over 1% each in the first two sessions of the week, the stock ended in the red in the next two sessions. However, the shares gained 1.6% on Friday to end at INR 4,547.70 on the BSE on the back of the company reporting an over 60% year-on-year (YoY) rise in its Q3 net profit.

Led by a 24% growth in its paying subscription suppliers, IndiaMART posted a profit of INR 113 Cr in Q3 FY23 as against INR 70 Cr in the year-ago quarter. Operating revenue surged 34% YoY to INR 251 Cr.

IndiaMART is among the few listed Indian tech startups whose shares are trading above their listing price. The B2B marketplace’s shares are currently trading over 285% higher than its listing price of INR 1,180 on the BSE and the NSE.

The post New-Age Tech Stocks Continue To Bleed; Nykaa Sinks Further This Week appeared first on Inc42 Media.

Valuation expert Aswath Damodaran has not shied away from speaking his mind on the current slowdown in the public markets and in particular, the inability of new-age businesses to meet their private valuations.  

In a blog post last year, Damodaran attributed the then ongoing mayhem in equity and bond markets and the implosion of cryptocurrencies to the pullback in risk capital. This is the capital set aside by investors for riskier investments in the hope of getting higher returns.

At the time, he predicted that the pullback in risk capital in 2022 was unlike the temporary pullback in 2020 and was more long-term like in 2000 or during the global financial crisis of 2008-09. And so far, many of these theories have proven to be on the mark. 

Known as the ‘Dean Of Valuation’, Damodaran also argued that the return of fear was healthy as VCs had become “lazy and sloppy” as they got easy returns for a decade. 

A professor of corporate finance and valuation at the Stern School of Business at New York University, Damodaran is considered an authority on private markets and business valuations for his simple insights and direct communication style.

Simply put, when he speaks, everyone listens. 

Speaking to Inc42, Damodaran shared his views on the Indian startup ecosystem, the state of tech companies on stock exchanges, and the funding winter and macroeconomic headwinds that have hit startups and big tech companies hard. 

“This is not just in India. Risk capital is retreating after a decade of excess across the world. This may be a healthy development overall,” Damodaran told Inc42 in a recent email interview.

The valuation guru spoke about his views on Paytm’s business model and its decision to buyback shares, Zomato’s acquisition of quick-commerce startup Blinkit, the upcoming disruption by fintech startups in the banking space, and much more. 

Edited excerpts

Inc42: Paytm’s market cap has fallen to about $4 Bn from its IPO valuation of about $19 Bn. What is your view on the company and also its recent buyback decision despite the heavy losses?

Aswath Damodaran: I think that the market has lost faith in Paytm’s management ability to monetise their users, and if the company is to make a comeback, it has to pivot from user growth to increasing the take rate. And a buyback by a young money-losing company is seldom a good idea, even if the company believes it is being undervalued by the market.

Inc42: One of the hot debates around the Paytm IPO was that retail investors don’t understand the business models of fintech startups which have various verticals. What’s your take on this?

Aswath Damodaran: It is actually a very simple model, at least for Paytm. Every time a transaction occurs on the platform, the company gets a percent of that transaction amount, i.e., the take rate. Paytm’s take rate is way too low to sustain their business model, and they need to raise that rate. All this talk of multiple verticals and user numbers cannot obscure that basic point…and they seem like distractions.

Inc42: Do you think the valuation metrics used traditionally involving future cash flows can be applied to tech startups that often go through slow growth periods? We see super high valuations despite a low revenue base and no path to profitability. 

Aswath Damodaran: If by valuation metrics, you mean pricing multiples, of course not. If by valuation metrics, you mean looking at a business’s cash flows, growth and risk, absolutely yes.

Inc42: There seems to be a huge difference in the way startups are valued in the private market and public market. There are also concerns being raised about overpricing of shares in the IPO. What’s your view on this dichotomy? 

Aswath Damodaran: By private market, I guess you mean VCs and they don’t value companies, they price them and so does the market. In some periods, the public market prices companies higher than the VCs (in most of the last decade). In some periods, the VCs price companies higher than the public market. 

[Speaking about BYJU’s] No one is valuing the company. Perhaps, it is time someone did. Stories without numbers risk being fairy tales.

In the near term after a public offering, companies are driven by traders, not investors. If you are investing in an IPO, be ready to be on a roller coaster.

Inc42: Let’s talk a little bit about Zomato and its decision to acquire Blinkit, which received a lot of criticism. The main concern was about Blinkit adding to the losses of Zomato, which has been somewhat allayed by the recent financials? How do you look at this acquisition? 

Aswath Damodaran: By itself, the Blinkit acquisition makes strategic sense since it buys Zomato growth, albeit with lower margins. That said, they paid a premium price for the company, and I believe that, at best, it is a breakeven investment for Zomato’s shareholders.

Inc42: The cryptocurrency and NFT mania seems to have hit a wall in the past year given the FTX debacle and more in the US. What’s your view on crypto as asset classes?

Aswath Damodaran: NFTs are collectibles, like fine art. The only problem is that it is not clear that the NFTs that people pay money for right now will be the NFTs that people will want in the future. 

As for cryptos, I think its advocates need to stop talking about how much money they have made trading them and start explaining what problems they solve more efficiently than existing currencies, and why they are more efficient at solving them.

Inc42: We saw relatively smaller IPOs in 2022 as opposed to 2021, Tracxn and DroneAcharya on the Indian stock market being examples. Is this trend set to stay? 

Aswath Damodaran: I don’t think you mean small listings, since the size of an IPO is based upon all of its shares outstanding. I think you are talking about small initial public offerings (that don’t look to raise big amounts). To me, it looks like these companies are less interested in raising capital and more in getting the right pricing and liquidity, which allows existing owners to cash out. 

The post Market Has Lost Faith In Paytm’s Ability To Monetise: Valuation Guru Aswath Damodaran appeared first on Inc42 Media.