The Nutgraf is a 10-min newsletter sent at 10 AM IST every Saturday. It connects the dots and synthesizes one big event in business, technology and finance that happened over the week in India. In a way you’ll never forget.

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Just 10 mins long Synthesis not analysis Sometimes memes

The Nutgraf

I have a question. 

Has your life slowly, steadily started going back to normal? Or is it still stuck in Groundhog Day mode? 

Another question. 

What is normal anymore?

Email and tell me. But for now, let’s dive in. 


There is No Alternative

Six months ago, it looked like the world’s most moribund market. But today, India’s telecom sector is seeing a virtual stampede of billions of dollars in investments from the world’s most powerful tech companies, private equity (PE) funds and sovereign investors.

Well, “sector” may be a misnomer because, for all practical purposes, there are just 2.75 players. The leading two, Reliance Jio and Bharti Airtel, each count as 1. The third private player, Vodafone Idea, is at best a 0.5, tottering, as it is, on the verge of collapse. And the state-owned BSNL is the final 0.25, beset with outdated networks, bureaucratic decision-making, and a large workforce. 

Other than Reliance Jio, every other player, integer or fraction, is loss-making.

The stampede is there to invest in Jio. Not in Jio Infocomm, the 10-year old telecom operator, but in Jio Platforms, its less-than-one-year-old parent. And the company that kicked it off on 22 April was Facebook, with a $6.5 billion dollar investment for a 9.99% percent stake. Facebook valued Jio Platforms at nearly $66 billion.

Less than two weeks later, US PE firm Silver Lake invested nearly $750 million in Jio Platforms, but at a valuation that was 12.5% higher than what Facebook invested at. 

Four days later, Vista Equity Partners, another US PE firm, would invest $1.5 billion in Jio Platforms.

Nine  days later, General Atlantic, also a US PE firm, invested $870 million in Jio Platforms.

Five days later, KKR, yet another US PE firm, invested $1.5 billion in Jio Platforms.

The stampede isn’t over yet.

Microsoft is reportedly discussing investing $2 billion in Jio Platforms. And Mubadala, Abu Dhabi’s state fund, another $1 billion.

To say this sort of mad rush by the bluest of global blue-chip investors is unprecedented would be to miss the point. These sophisticated investors have access to virtually the best deals around the world. And they rarely parade themselves like this, seemingly paying obeisance at Jio’s doorstep before quietly going back into the shadows. Oh, and in the middle of the worst globally synchronised economic downturn we have seen in our lifetimes. 

What gives? What is the investment catnip that brings together Facebook and Microsoft? Or multiple hard-nosed and sharp-elbowed PE giants? What is the allure of Jio Platforms?

To answer that question, let’s look at this slide from Reliance’s investor presentation from October 2019. 

The valuation of the “cheapest” company in that list, Tencent, was close to $400 billion. With its current valuation around $70 billion, Reliance figures it has a bit of upside ahead. If we take Apple, the odd hardware-driven player out, there are three American giants and two Chinese ones. Reliance is positioning Jio Platforms as the only eligible Indian entrant, and thus, investment.

The “TINA” factor

The phrase “There is No Alternative” was coined by British philosopher Herbert Spencer (who, not Darwin, also coined the phrase “Survival of the Fittest”) in the late 1800s to defend laissez-faire government and classical liberalism. It was made popular by British Prime Minister Margaret Thatcher in the 1980s while defending deregulation and a market-driven economy.

The TINA factor has been used to great effect by politicians, including India Prime Minister Narendra Modi, to gather votes even from fence-sitters because of a perceived lack of viable alternatives.

Among investors, TINA is often used to justify stock investments because alternate asset classes offer much lower returns.

Whatever your view be of India’s economy currently (estimates point to a GDP contraction of 5-7%), or of its growth prospects, you cannot ignore the fact that it will be one of the largest e-commerce, Internet, and telecom markets globally. Now, if only there were a company that would be present in every aspect of Indian society.

Even better, one that was listed on a US stock exchange, so global investors wouldn’t need to wade through India’s unpredictable regulators and governments. There was only one problem. Indian laws required companies to first list in India before heading to international exchanges. 

That changed this month.

Rusmik Oza, executive vice president – head of fundamental – research, Kotak Securities, said, “A foreign listing would give access to overseas capital, better visibility and allows foreign investors to directly invest in those companies rather than coming through the foreign portfolio route. Additionally, foriegn investors can avoid INR currency risk by investing in them directly overseas.”

Investing in Indian equities comes with not only the asset class, but also carries a currency risk. A depreciating currency tends to impact dollar returns for foreign portfolio investors. With this move, a foreign listing would cut the foreign currency risk for this class of investors.

A week later, news broke that Reliance was considering listing Jio Platforms internationally.

The conglomerate backed by Mukesh Ambani, Asia’s richest man, is preparing Jio Platforms Ltd. for an initial public offering outside of India, the people said. The offering could happen in the next 12 to 24 months and the company hasn’t decided on a listing venue, one of the people said. There’s also no final decision on timeline and size, according to the people, who asked not to be identified as the discussions are private.


Investors are betting on Jio’s access to India’s huge consumer market, and its potential to shake up traditional industries in the country — from retail to education and payments — with its technology. India is the only major open Internet market where foreign technology giants such as Amazon.com Inc., Walmart Inc. and Google’s parent Alphabet Inc. can compete for market share.

Ambani prepares Facebook-backed unit for overseas IPO, Bloomberg

But if India is the only open Internet market where foreign technology giants can compete for market share, doesn’t that mean there are alternatives to Jio Platforms for those investors who are long India?

The Alternatives

Through a maze of cleverly designed corporate structures, Jio Platforms is everything, and yet nothing. It owns India’s largest telecom company, but isn’t one itself. It will offer e-commerce services, yet isn’t a retailer itself. There’s a Jio Payments bank regulated by India’s central bank, but Jio Platforms isn’t regulated. It sells a plethora of apps and services through its various wired, wireless and TV platforms, but none of those revenues are liable for licence fees to the government. Not so its telecom competitors like Airtel and Vodafone-Idea.

Which means in India’s increasingly overregulated tech sector, Jio Platforms skates over everyone else with ease. 

Its telecom competitors are bogged down with billions of dollars in debt and backdated license fees. TINA.

Amazon and Flipkart (owned by Walmart), India’s leading e-commerce companies, both foreign-owned, spent the last two months shuttered on account of India’s decision to severely curtail e-commerce deliveries during its nationwide lockdown. Meanwhile JioMart, a grocery service from Reliance, just launched in 200 Indian cities this week. TINA.

Reliance Industries has launched an online grocery service, JioMart, the head of its grocery retail business said, in a move aimed at rivalling Amazon.com’s local unit and Walmart’s Flipkart in the huge Indian market.


That partnership will help Reliance roll out service for India’s grocers and small businesses by capitalising on India’s 400 million-strong user base for Facebook’s WhatsApp messaging service.

Chinese companies and their investments and investors now need to pass through a mandatory government approval process, which has no guaranteed outcome or timelines. 

Thanks to the worsening US-China cold war, Chinese companies are finding their access to US capital markets cut off. As a result, many Chinese companies are choosing to list in Hong Kong instead. That leaves Reliance and Jio Platforms positioned well to take advantage of both the US-China tech cold war as well as capital vacuum. Andy Mukherjee explained it best. TINA.

That’s where a tech cold war may help. Wall Street investors have been able to profit from the explosion of e-commerce in China, even though the likes of Facebook and Amazon.com Inc. are largely shut out of the People’s Republic. If that access gets curbed by geopolitics, then Ambani’s story becomes more compelling. He can offer the vision of a vast retail network that has Facebook’s popular WhatsApp messaging system processing orders and payments for neighborhood shops connected digitally to a billion-plus buyers. That could be a big draw. A U.S. home is within Ambani’s reach, especially if Chinese firms are forced to vacate.

A Tech Billionaire May Find Use in a Cold War, Andy Mukherjee, Bloomberg

Meanwhile Jio is also considering making its own 5G equipment, dovetailing perfectly into Huawei’s global persecution by the American government. My colleague Pratap Vikram Singh reported key developments about this earlier this month. TINA.

On 25 February, during a roundtable discussion between US President Donald Trump and Indian CEOs, Mukesh Ambani rose to speak. “We’re the only network in the world which doesn’t have a single Chinese component,” the Reliance Industries Ltd (RIL) chairman said. Some saw it as a facile attempt to play to Trump’s famous anti-China rhetoric. Within Reliance Jio Infocomm—RIL’s telecom subsidiary—it was seen as a sales pitch: Jio could play a part in building the next generation of US telecom networks.

And while it partnered with Samsung to build its $46 billion pan-India 4G network, its 5G project is going to be a DIY effort as its 10-year lock-in period with the Korean telecom major is set to run out in a few years.

Reliance Jio’s 5G Push to be India’s answer to Huawei, The Ken

As a result, Reliance Industries and its Chairman Mukesh Ambani have emerged as the pick of Indian family-controlled businesses that have prospered during the Covid-19 lockdown. Yesterday, Business Standard called them “the new Corona warriors”.

Remember the list of global peers Reliance benchmarked Jio Platforms against?

  • Alphabet
  • Amazon
  • Alibaba
  • Facebook
  • Tencent
  • Apple

Facebook tried to take on Reliance until late last year, before folding abjectly. In case you’ve forgotten, Facebook CEO Mark Zuckerberg, after investing $5.7 billion in Jio Platforms, thanked Reliance Chairman Mukesh Ambani for the partnership. Not the other way around. TINA.


Apple, which makes products no one else can but everyone wants, operates on its own plane. Let’s exclude it. Alibaba and Tencent are now subject to bureaucratic black holes. Amazon is working furiously to recover from a virtual shutdown of its main e-commerce business, one which has lasted nearly two months. Who’s left?

Alphabet, Google’s parent company.

Already dominant in India when it comes to search and Android, Google has also spent untold millions of dollars becoming the leading Unified Payments Interface (UPI)-based digital payments company in India. But it learned last year that there is such a thing as being too successful.

In September 2019, news broke of a market share cap being considered on UPI players to reduce Google Pay’s dominance. From my colleague Arundhati Ramanathan’s must-read analysis of Google’s opportunity and challenges.

Up till now, most of the information Google has on its users only helped it map their intents, not their spends. Unlike, say, Amazon, which knows what products its users spend their money on. Payments is critical for Google to bridge this gap, eventually leading to better monetisation. Of all the things Google knows about you—location data, SMS data, search history, language preference, frequent routes, people you talk to—payments data best fits in with search and location data.

Imagine if you searched for a product you wanted to buy. Say, an iPhone 11. Without payments, Google search could only show you possible retailers you could buy the iPhone’s latest model from. But with payments, it could fulfil your intention of buying an iPhone by connecting you to that merchant through offers using Google Pay. This opens up a whole new revenue stream.

In India’s Digital Payments, Google’s Achilles Heel turns Midas Touch, The Ken

Earlier this week, Aditya Kalra and Aditi Shah at Reuters broke the news of Google facing an antitrust case over its unfair advantage when it came to payments.

India’s antitrust body is looking into allegations that Alphabet Inc’s Google is abusing its market position to unfairly promote its mobile payments app in the country, five sources familiar with the case told Reuters.

The complaint was filed in February and the Competition Commission of India (CCI) has kept the identity of the complainant confidential, the first source with direct knowledge of the case said.

The complaint alleges the U.S. tech giant more prominently showcases its Google Pay app inside its Android app store in India, giving it an unfair advantage over apps of competitors which hurts consumers, the source added.

Google faces antitrust case in India over payment app, Reuters

I’ll end this week with the Financial Times’s news break that even Alphabet tried to invest in Jio Platforms but was pipped by Facebook. And that it is now considering an investment in Vodafone-Idea.

Google is exploring an investment in Vodafone’s struggling India business in a move that could pit the US internet group in a battle against Facebook for the world’s fastest-growing mobile market, according to people familiar with the matter.

One of the people said Google was considering buying stake of about 5 per cent in Vodafone Idea, a partnership between the UK telecoms company and India’s Aditya Birla Group that has been under severe financial strain. Another said the process was at a very early stage.


Google parent Alphabet has also held talks about acquiring a stake in Jio, and although discussions are still ongoing, it has lagged behind its rival in securing a deal. Pursuing Vodafone Idea would potentially pit Google against Facebook and an increasingly dominant Jio but the company could also make multiple investments in India.

Google explores Vodafone Idea stake as part of India push, Financial Times

Is there an alternative?


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