We finally returned this week after a small hiatus to do what we love, i.e. write. And in this week's wrap-up, we talk about Zomato’s Unit Economics, SEBI forcing fund managers to have a stake in their own MFs, the rising prices of edible oil, commodities and brief on Softbank's recent performance. But before that a note on Finshots Markets.
Last week, DMart posted its results for the March quarter and while profits jumped 55% compared to the same period last year, the stock price didn’t reflect these changing dynamics. So what’s happening here? Why aren’t investors upbeat about the company’s prospects despite these changing fortunes?
Well, that's what we try and find out here
Zomato and the Unit Economics Problem
Zomato is finally going public and the Draft Red Herring Prospectus — detailing the company’s financials and business prospects, is now out there for the world to see. And since there’s absolutely no way we will be able to cover everything inside the prospectus, we focused on just one thing - Unit Economics. Basically, trying to see if Zomato has finally found a way to fulfil an order without spending more money than it earns. So in our Monday newsletter, we offered an extensive breakdown of Zomato’s financials.
Does your fund manager have skin in the game?
On April 28, 2021, SEBI introduced a new rule. They mandated key employees of asset management companies i.e. mutual fund companies to invest about 20% of their salary in the schemes they run or oversee. They’ll have to tie it up for 3 years or for the duration of the scheme, whichever is shorter. Basically, it’s a diktat forcing fund managers and other key personnel to have their skin in the game. But what is skin in the game?
Worry not we got you covered, the explainer is right here!
Edible Oil to the Moon
Edible oil is witnessing a price surge like no other. Palm oil, sunflower oil, soybean oil, you name it — Everything is now more expensive. In some cases, prices have increased by as much as 100% compared to March last year. And this has broad implications for everyone, including you.
Our Wednesday’s story explains the worrying trend of skyrocketing edible oil prices, do check it out.
The Commodity Binge
If the previous story was about edible oil, on Thursday we went ahead and looked up the whole commodity sector. And just like edible oil, their prices too were skyrocketing. We are talking about things like iron ore, copper, and wood. And while we’ve already written stories about some of these items in the past, we still thought it would make sense to look at some of the other factors affecting the demand-supply equation. So in this story, we talk about the global economic recovery and how it’s pushing commodity prices to stratospheric levels.
The story of the most profitable company in all of Japan
SoftBank just recorded an annual profit of $43 Billion. And while it was mainly driven by the company’s investments in high profile startups, this marks a spectacular turnaround for SoftBank who only last year recorded losses to the tune of $13 billion. So it’s imperative to ask — Have SoftBank and Masayoshi Son, its enigmatic founder, finally turned a corner? Is the company now the greatest venture capital investor of all time?
In Friday’s newsletter, we talk about this and more.
Anyway, that's it from us this week. We will see you on Monday :) In the meantime, if you want to share this wrapup with you friends, family and loved ones, here are the links - WhatsApp, Twitter and LinkedIn