Finding Outperformers

One key reason Zomato witnessed a sharp selloff at time of acquiring Blinkit was actually its shareholding pattern! Year 2022 was a nightmare for many tech funds globally. After enjoying the boom in 2020-21, many faced their sharpest drawdowns in 2022-23. As a result, many were eager to exit their investments in developing markets to reduce their risk and create liquidity back home. Two of those funds were actually - SoftBank Group Corp. & Tiger Global Management, who collectively owned ~65% of Grofers (now Blinkit!) The acquisition was an all-equity deal, where Grofers' shareholders were awarded listed Zomato shares. This was seen as an easy exit for Grofers' backers, as the company was far from going public, and most big VCs were unwilling to inject more funds to combat rising competition or buyout their stake. Roughly 63 crore new shares were issued leading to 8% dilution for Zomato's exiting owners. The markets had already anticipated that these shares would get dumped by the funds as soon as the regulatory lockin period by SEBI post acquisition gets over - which would further add to the free float. That's exactly what happened as today both Softbank & Tiger Global are no longer shareholders of Zomato. Hence they gave a thumbs down to the deal. ************************************** Read more about evolution of Zomato's ownership in our blog. Link in comments below⬇️ Not a subscriber yet? Checkout Finding Outperformers - all research is free to access! #india #startups #blinkit #zomato #grofers

What you see below is *NOT* a catalogue of a quick commerce player promising to deliver ‘X’ number of SKUs in 10 mins! > This is a catalogue for over 40,000+ restaurants pan India who order their sourcing of input materials from Hyperpure by Zomato > Not only restaurants, but these perishable & frozen items are also supplied to dark stores of Zomato’s quick commerce arm - Blinkit, which is helping it expand faster over all Tier 1 & 2 cities, with ready supply chains & relationships in place > In fact, Rishi Arora, who was a co-founder of Blinkit and worked on building it for 9 years, has been heading Hyperpure for over a year now. He understands both businesses very well and knows how to work them out best together! Read more on 'Hyperpure' at Finding Outperformers! Link in comments below⬇️ #zomato #blinkit #hyperpure

India urgently needs privatization of its DISCOMs! 90% of India's power distribution, controlled by respective state governments, has now become a breeding ground for inefficiencies. The accumulated losses stand at INR 6.5 lakh crore as of FY23, which is well over 20% of India's central budgeted annual revenue. Reasons? 1. 𝐈𝐧𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬: Issues in power procurement, billing, and collection practices 2. 𝐇𝐢𝐠𝐡 𝐜𝐨𝐬𝐭𝐬: Rising cost due to higher interest rates, rising power demand, and the cost of imported coal 3. 𝐏𝐨𝐨𝐫 𝐜𝐚𝐬𝐡 𝐟𝐥𝐨𝐰: Delayed consumer payments, leading to insufficient cash income, preventing timely payments to energy generators 4. 𝐈𝐧𝐬𝐮𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐭𝐚𝐫𝐢𝐟𝐟𝐬: Many times insufficient tariffs can contribute to losses 5. 𝐓𝐡𝐞𝐟𝐭: High levels of theft can contribute to losses One of the only state to have privatized its power distribution is Odisha where 51% stake was taken over by TATA Power, which has swung back to profits and demand continuing to rise 20% YoY due to effective & efficient service. Similar is the case of Delhi which has seen minimal outrage this year despite demand hitting new high in summers. *********************** Coming weekend, we present a detailed analysis on how 'Tata Power' is well positioned to take over state-owned DISCOMs with lowest friction. Research to hit right in your inbox, stay tuned! Not a subscriber yet? Checkout Finding Outperformers and subscribe today for free! (this is not an investment advice) #electricity #india #tata #power

With everything rallying in the stock market, are the laggard 'Private Banks' finally set for a rally? 𝐍𝐢𝐟𝐭𝐲 𝐏𝐫𝐢𝐯𝐚𝐭𝐞 𝐁𝐚𝐧𝐤 𝐈𝐧𝐝𝐞𝐱 Last 1 year return: 9.4% (Nifty at 27%) Last 5 year return: 66% (Nifty at 130%) That's interesting, right? Valuations so cheap!? NO! Everything happens for a reason, and if you think now is the right time to invest in private banks, let me give you a bit of a downer: Axis Bank slightly raised its FD rates yesterday and now offers 7.25% as highest rate from 1 to 2 year time frame. This was unexpected but its happening! After the elections got over, government was expected to come back and spend big again which would infuse liquidity and boost bank deposits in the system and hence FD rates rise wasn't expected. According to the FICCI-IBA Bankers' Survey, around 80% of public sector banks saw a decline in their CASA share in the first half of 2024, as customers shifted towards higher-yielding term deposits. With increasing pressure from the Finance Ministry & RBI to attract more deposits, public sector banks might raise their FD rates further, which could, in turn, push private banks to make their FDs more competitive. Hence, NIMs compression is not over yet! ********************************** Check out our continued bearish view on private banks at Finding Outperformers  — the link is in the comments below ⬇️ #private #banks #psu #india

Here is how Tata's Bigbasket made a 180° shift in their quick commerce strategy in 360 working days: 𝐀𝐩𝐫𝐢𝐥 2023: "The unit economics for 10-minute delivery just doesn’t work. Consumers never wanted quick delivery, it was something that was thrust upon them. BB Now, which delivers groceries in 15-30 minutes, that is the model which will work because it is able to leverage warehousing" 𝐌𝐚𝐲 2023: "Quick commerce growth has already started to slow down. This is typical of high-growth businesses when they start and settle down soon, that's already happening." 𝐌𝐚𝐫𝐜𝐡 2024: “Consumers have lapped it up …. they(consumers) have liked the service and now we think quick commerce is here to stay” 𝐍𝐎𝐖: "Bigbasket is now a full fledged quick commerce platform. We will now open 300 more dark stores, with 10 mins as default delivery option to all BB Now orders." As they make a pivot from just Brick & Mortar model with aim to take a lead in 'Quick commerce', will they become a successful player? or will it remain as an 'also' along offline strategy - which as per Sanjeev is the real moat that players like Blinkit/Zepto have as they focus only on Quick Commerce! ******************* India’s Quick Commerce is getting exciting week after week, and Finding Outperformers shall cover it for you! Link is in the comments below⬇️ Pic: Business Standard #blinkit #zepto #swiggy #instamart #zomato

Zomato added 400,000+ new shareholders (mostly retail) in the first half of 2024, but does it impact the share price? Buzz around Blinkit and Zomato has been rising lately on platforms like LinkedIn and X. Whether it’s the growth of quick commerce, with Blinkit as the largest player, or new initiatives and features launched by Zomato, including the upcoming ‘District’ app, they have been gaining lots of attention. This, in turn, has led to many new retail investors buying the stock recently as the data shows. 𝐁𝐔𝐓 𝐈𝐓’𝐒 𝐍𝐎𝐓 𝐄𝐍𝐎𝐔𝐆𝐇 𝐓𝐎 𝐌𝐎𝐕𝐄 𝐓𝐇𝐄 𝐍𝐄𝐄𝐃𝐋𝐄! While the absolute number of additions in 2024 looks significant, but in terms of the total percentage of shareholding it actually isn’t. New retail investors buying Zomato stock in the first six months of 2024 didn’t even result in a 1% rise in retail shareholding! This percentage is minuscule, especially considering that Alibaba Group just in August 2024 sold a 2.40% stake in Zomato in one go, contributing to a total of 43% shareholding being sold by various investors over the last two years. One might assume there’s a frenzy with everyone discussing the same company, but that might not be the case just yet! ***************************** Find complete research in comments below⬇️ Follow Finding Outperformers for more. #zomato #blinkit

Blinkit opened 1 dark store per day in 2024, & now aiming for 1.5 stores daily over the next 2 years! A big part of their expansion is focused towards big cities in South India which are currently dominated by Zepto and Swiggy Instamart. And for this expansion which needs to happen at a lightning pace, Blinkit is not alone but is silently supported by another subsidiary of Zomato named Hyperpure by Zomato! Started in Bengaluru, 'Hyperpure' is restaurant supply chain solution which today is perfectly positioned to also support the quick commerce's arm with its supply chains that source directly from farmers and delivers fresh produce the next day. From fruits & vegetables to groceries, to poultry, meats and seafoods, Hyperpure has over 4,000 products covering Tier 1 & 2 cities & now supplies these to Blinkit's dark stores too! SYNERGIES AT WORK (silently!)✅ ********************************* Recently at Finding Outperformers, we've written a detailed blog on how Zomato is leveraging Hyperpure's capabilities to drive the expansion of Blinkit by synergizing the supply chains of both these subsidiaries. Link is in the comments below⬇️ (Subscribe today for free!) Anuj Garg | Finding Outperformers | Pic: Inc42 Media #quick #commerce #supply #chain

People on social media have been talking a lot about Zomato/ Blinkit in last few months. Is it impacting the share price? In the last 2 years, as Zomato's share price has skyrocketed by 5X, one might think that many retail investors are buying into the story. Additionally, as more people become familiar with and experience quick commerce through Blinkit - loyal customers who love the service, may be more likely to become shareholders (agreed?) One must note that Zomato's listed shares have seen roughly 45% of its equity sold by top PE funds and others in the last two years, ever since the SEBI lock-in restriction ended on July 25, 2022 (one year after listing). Sellers include Uber, Alibaba Group, Tiger Global Management, Sequoia & more. This has created a significant increase in the free float, which retail investors might have helped fill, right? > 𝐁𝐔𝐓 𝐃𝐀𝐓𝐀 𝐓𝐄𝐋𝐋𝐒 𝐀 𝐃𝐈𝐅𝐅𝐄𝐑𝐄𝐍𝐓 𝐒𝐓𝐎𝐑𝐘! Retail investors own barely 8% of Zomato and their holdings have not been rising (rather falling over 2 year period!). There are 20Lac+ retail investors in Zomato, even if 4 lakh new demat holders decide to add Zomato, it hardly moves the needle by not even 1% ownership increase as data shows. Neither do analysis of google search trends confirm any rise in interest in share price of Zomato in last many months! ******************** This week we present a detailed analysis on fast changing share holding patterns of Zomato in the last 2 years. Link in comments below⬇️ Not a subscriber yet? Checkout Finding Outperformers & subscribe today for free! (this is not an investment advice) #blinkit #swiggy #instamart #zepto #quick

Understanding the shareholding patterns of listed startups can be challenging. They not only have more variables to consider, such as ESOPs (sometimes 10-15% of total equity), but also tend to have smaller founder/ promoter holding & larger private investor stakes at the time of their IPO. These private investors are often poised to exit once the company goes public. The pace of such exits often depends on factors unrelated to the company's performance. Global liquidity tightening and constrained relation with China, caused Zomato to witness about 45% of its equity being sold in open market ever since the regulatory lock-in got over in July 2022, with most of private investors exiting the stock. Such selling in open markets significantly increases the free float that public market investors must absorb, but sometimes markets aren't prepared for it. RESULT? Share price tanks🔴 ******************************** This week we present our analysis on fast changing shareholding pattern of Zomato and why we think the share is not in euphoria. Research link: https://lnkd.in/gSdq2PKZ (This not an investment advice. If aren't a subscriber yet, then checkout Finding Outperformers and subscribe for free today!) #zomato #blinkit #shareholding #pattern

Zomato's value has surged 5 times from $5 Bn to over $25 Bn in the last 2 years, but we are missing the biggest point! The more relevant and most underappreciated fact is that the rise has happened when roughly 40% of its total equity was actually being sold by pre-IPO investors/owners in open market! Ownership of Uber, Alipay, Tiger Global Management, Sequoia and more have fallen to 0% or at below 1%. India has never seen a similar circumstance before, where a listed entity has continuous supply of shares being dumped in the market, adding to its free float, but the share prices doesn't stop rising & goes on to become part of 'Top 50' most valued listed entity in the same time frame. 𝐐: 40% was sold, did the retail investors buy it? 𝐀𝐧𝐬: NO! The share of individual investors have actually fallen from 9.88% two years ago to 8.67% today. Then WHO BOUGHT IT? ****************************** Coming weekend, we present a detailed analysis on fast changing share holding patterns of Zomato in the last 2 years. Research to hit right in your inbox, stay tuned! Not a subscriber yet? Checkout Finding Outperformers and subscribe today for free! (this is not an investment advice) #blinkit #swiggy #instamart #zepto #quick