017 Monsoon is over but dark clouds still loom
Plus: Q3 - Funding, Unicorns, & IPOs
September 30th officially marked the end of the Indian Monsoons.
India received 934.8 mm rainfall, which was much higher than the 820 mm recorded last year during the same period. It is even higher than the normal level of rainfall of 868.6mm.
The best part is that the monsoons were well distributed and the Indian reservoir’s were at a comfortable level of 87% as of last week compared to 71% last year.
Now onto the bad news. Bad news x 3.
First, the war in the middle-east is starting to show it’s economic consequences. We are seeing longer flight times, increased airfares, and the likelihood of increased oil prices, which could further restrict cargo movement.
Second, there is a strike involving 45,000 dockworkers at 36 East Coast ports causing major disruptions in trade and supply chains during the holiday season. This could significantly impact not only the U.S. economy but also India’s exports, with potential losses exceeding $1 billion a day!
And finally, unless you have been living under a rock, the Indian markets have been on a wild ride this week. For the fifth consecutive day, both the Sensex and Nifty have been sliding down. Over these five days, the Indian markets have lost more than 4% of their value. Since hitting record highs on September 27, they’ve dropped about 4.5%.
This Week In Indian Start-ups
1. Record Funding in Q3 2024 📈
Indian startups raised approximately $4.08 billion in Q3 2024, marking a substantial increase from previous quarters. This amount included 85 growth and late-stage deals totaling $3.3 billion, alongside 207 early-stage deals worth $754 million.
2. Emergence of New Unicorns 🦄
Three startups—Moneyview, Rapido, and Ather Energy—joined the unicorn club this quarter, bringing the total to six for 2024 (the other three being Krutrim, Perfios, and Porter). This reflects a recovery in investor confidence, particularly in late-stage funding, which saw a 115% increase compared to the previous year.
3. Sector & City Performance 💹
The fintech sector continued to lead in funding, while agritech struggled with only $150 million raised across over 30 startups. Notably, Bengaluru dominated the funding landscape, securing $1.38 billion, followed closely by Delhi-NCR with $1.3 billion.
4. Upcoming IPOs
Several startups are gearing up for public offerings, including Ather Energy, Swiggy, and Ola Electric, which have filed their Draft Red Herring Prospectus (DRHP). This bodes well for the Indian startup ecosystem as it prepares for more public market entries.
5. Layoffs and Executive Changes
The quarter saw a reduction in layoffs, with about 1,200 employees affected compared to previous months. However, eight startups shut down.
TIL F&O
My thick head always struggles to understand financial instruments.
And this week it’s Futures & Options trading.
You’d think that after chatting with someone who manages money for a living just last week, I’d have it all figured out. But nope! I still find myself Googling it every time it comes up in conversation.
I asked my LLM to explain F&O but had to resort asking it to ELI5 - (excuse the derogatory tone of the AI).
Imagine you want to buy a toy, but you think the price might go up next week. F&O trading is like making a special promise about that toy.
Futures
Promise to Buy or Sell:
A futures contract is like saying, “I promise to buy this toy for $10 next week, no matter what happens.” If the toy's price goes up to $15, you get a great deal! But if it goes down to $5, you still have to pay $10.
Options
Choice to Buy or Sell:
An options contract is like saying, “I can choose to buy this toy for $10 next week, but I don’t have to if I don’t want to.” If the price goes up, you can buy it for $10 and save money. If it goes down, you can just decide not to buy it.Apparently 93% of individual F&O traders lost money between FY 22 and FY 24 in India, so naturally SEBI has come down hard to cut down on the trading.