How Vertex Ventures invests

Hello,

To facilitate ease of doing business, SEBI has proposed that changes in the private placement memorandum of alternative investment funds (AIFs)—such as fund size, contact details, track records etc—can be directly submitted to it rather than through a merchant banker. The move aims to rationalise the cost of compliance for AIFs.

The market regulator is also acting against unregistered investment advisors. It has asked financial influencer Ravindra Balu Bharti to deposit over Rs 12 crore in unlawful gain.

Meanwhile, four out of the 10 most valued firms added Rs 1.7 lakh crore to their market valuation last week on the stock market. HDFC Bank and LIC emerged as the biggest gainers while Reliance Industries remained the most valued domestic firm.

Speaking of the bourses, foreign portfolio investors pulled out Rs 325 crore from Indian equities in the first week of April owing to relatively high valuations and the upcoming general elections. The net outflow came after FPIs invested Rs 35,000 crore in March and Rs 1,539 crore in February.

ICYMI: All you need to know about Wipro’s new MD and CEO Srinivas Pallia.

Oh, and take a look at the Regent International apartment building in Hangzhou, China. 

It is the world’s largest residential building and houses 20,000 people.

In today’s newsletter, we will talk about 

• Why Vertex Ventures is bullish on India
• Indian manufacturing one-upping China

Here’s your trivia for today: What is the rarest gemstone mineral in the world?

Investor

Why Vertex Ventures is bullish on India

Over the last decade, Vertex Ventures Southeast Asia and India has been steadily investing in the Indian startup ecosystem. The Singapore-headquartered early-stage venture capital firm has made around 30 startup investments along with a few exits. It counts unicorn startups including FirstCry, Licious, and Xpressbees in its portfolio.

It is now looking to expand the scope of its investments in India.

Investment thesis:

• Till now, Vertex Ventures in India has been focused on four segments for investments—consumer tech, fintech, SaaS, and healthtech. Now, it also wants to invest in mobility, sustainability, and clean energy.
• Even as the VC firm looks to expand its reach, it wants to stick to pre-Series A and Series A investment stages, with ticket sizes in the range of $4-6 million in each company.
• Vertex Ventures has also earmarked $50 million from its fifth fund totaling $541 million to back women-led startups.

Industry

ICYMI: Indian manufacturing one-upping China

India is positioning itself as a lucrative option for global companies looking to diversify operations by establishing an additional production base outside of China. The China Plus One strategy has become increasingly significant, particularly in light of shifting global dynamics and the uncertainties arising from over-reliance on Chinese manufacturing. 

“Earlier, every part or component for electronics was imported—from cables, wires, plastic coverings, to even batteries. Now, the imports have vastly reduced and these are made locally," says Ashok Rajpal, MD of Ambrane India.

Edging out:

• In 2023, India became the second-largest smartphone-producing country.‘Made in India’ mobile phone shipments crossed the 2-billion cumulative units mark during 2014-2022.
• “Concrete drone ecosystem support, including testing facilities and import exemptions for critical components, is crucial for boosting local value addition,” says Vipul Joshi, CFO of ideaForge.
• India also needs to standardise manufacturing processes, especially in smaller industries, due to which many MSMEs get left out of producing for corporates, says Shaurin Patel, MD at Vexma Technologies. 

News & updates

• Out there: SpaceX successfully launched 21 more of its Starlink broadband satellites from a seaside base in California. A Falcon 9 rocket carried the SpaceX Starlink spacecraft, including six that can beam service directly to cell phones. Starlink's mega constellation currently consists of more than 5,650 operational satellites in low Earth orbit. 
• Internet regulation: X, formerly Twitter, has been "forced by court decisions" to block certain popular accounts in Brazil and is prohibited from giving details of the order, the company said. Elon Musk said in a post that this order could lead to a total loss of revenue and shut down of the offices in Brazil, promising that he would legally challenge it where possible.
• Focus on R&D: China's central bank will set up a $70 billion re-lending programme to support the country's science and technology sectors, according to a statement. The programme will offer loans via 21 banks to small and midsize technology companies at an interest rate of 1.75%.

What you should watch out for

• Due diligence: The RBI will commence a special audit of IIFL Finance and JM Financial Products to further probe their regulatory breaches from April 12. While IIFL Finance is barred from extending gold loans, JMFPL is facing a ban on financing shares or debentures. The central bank seems to be on a system clean-up mission, indicating zero tolerance for persistent regulatory non-compliance or misgovernance. After the crackdown on Paytm Payments Bank, the ball is in the court of the fintech ecosystem to double down on corporate governance and due diligence.
• Troubled times: Embattled edtech firm BYJU'S expects to pay March salaries of its employees by April 8. The company blamed the delay in salaries on the interim order by NCLT to keep the funds from the $200 million rights issue in an escrow account. It has sought arbitration in the matter involving miffed investors. MEMG Family Office, led by Ranjan Pai, too initiated arbitration proceedings against BYJU'S over the alleged non-repayment of loans.

What is the rarest gemstone mineral in the world?

Answer: Painite. Discovered in 1951, only about 300 crystals have ever been found.

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