Also in the letter:
■ Nick Clegg leaves Meta
■ Sebi action against Ketan Parekh
■ E-truck incentive challenges
HUL in acquisition talks with D2C brand Minimalist valuing it at Rs 3,000 crore: sources
Mohit and Rahul Yadav, cofounders of Minimalist
Hindustan Unilever (HUL) has held discussions with direct-to-consumer (D2C) beauty brand Minimalist for an acquisition, valuing it at Rs 3,000 crore, sources aware of the matter said.
Driving the news: While discussions are ongoing to acquire a majority stake, it could eventually lead to a 100% acquisition. With this deal, HUL is planning a larger strategy to enter niche, high-margin segments, particularly in the digital space, where the market leader now faces competition from numerous new-age local and global brands.
Tell me more: Jaipur-based Minimalist counts Peak XV Partners as a shareholder with a 6% stake. Founders Rahul Yadav and Mohit Yadav collectively hold nearly 84%. The company was last valued at approximately $75-80 million during its private capital raise. In July 2021, Minimalist raised $15 million in a Series A funding round led by Sequoia Capital India with participation from Unilever Ventures. The D2C startup was valued at $75-80 million at the time.
Revenue details: Minimalist saw a nearly 86% increase in revenue to Rs 350 crore in FY24, while its profit doubled to Rs 10.8 crore. In FY22, however, it reported a higher profit of Rs 16 crore on revenue of Rs 112 crore, according to Tracxn data.
ET Analysis: Zomato’s dream run on D-Street may hit a bump or two
Zomato CEO Deepinder Goyal
Zomato became the first new-age startup to enter the 30-member benchmark BSE Sensex. But some factors could interrupt its dream run on the bourses.
Driving the surge: During 2024, the Deepinder Goyal-led company’s stock more than doubled, fuelled by the growth of its quick commerce arm Blinkit, its fastest-growing business segment.
Its weightage in the Sensex stands at 2.8%. This is higher than that of large consumer product companies such as HUL, Nestle, Asian Paints and Maruti Suzuki.
Source: Google
Yes, but: The stock has gained a little over a percent since its entry in the benchmark index on December 23. An estimated $513 million worth of investments has poured into the stock. With all the near-term positives priced in, investors are questioning whether the stock is peaking out.
Hitting the brakes: Some factors that may impact Zomato stock’s positive run are:
- Q-comm race: Intensifying race in the rapid delivery segment could put pressure on profitability.
- Winner’s curse: After initial boost, stocks getting included in a benchmark index tend to underperform.
- Consolidation: After over a decade of fast growth, the business may enter a consolidation phase.
Nick Clegg, who set up Meta’s oversight board, exits company ahead of Trump return
Former British deputy prime minister Nick Clegg is stepping down from his role as president of Meta’s global affairs and will be replaced by Republican stalwart Joel Kaplan.
This comes ahead of the return of Donald Trump, who has been vocal of Meta’s censorship of conservative voices.
On the way out: Clegg had handled policy and regulatory issues globally for Meta since 2018. Meta chief executive officer Mark Zuckerberg thanked Clegg for making an “important impact advancing Meta’s voice and values around the world.”
Clegg said Kaplan, who served as deputy chief of staff for policy under then-president George W. Bush from 2006-2009, is the right person for this position.
Six-year stint: Clegg’s time at Meta coincided with heightened scrutiny of ‘big tech’ and societal pressures prompting new laws and norms around social media.
- He was instrumental in setting up Meta’s oversight board, an independent body to review Meta’s content moderation decisions.
- As a former EU politician, Clegg worked with EU policymakers to construct Meta’s response to emerging digital policies in the region, including the Digital Services Act and the Digital Markets Act.
- Clegg also contributed to Meta’s rebranding from Facebook to Meta.
Meta and Trump: Meta seems to be attempting to forge a closer relationship with the Republican party with this appointment, as are other internet companies. Before the November election, Apple CEO Tim Cook and Google’s Sundar Pichai began reaching out to Trump to put themselves in a position that would potentially benefit their businesses.
Ketan Parekh’s in regulatory crosshairs, again
The Securities and Exchange Board of India (Sebi) has passed an interim order against stock market operator Ketan Parekh and his associates, including Singapore-based Rohit Salgaocar, for allegedly front-running trades of an unnamed US-based fund.
What’s happening?
- In 2003, Sebi had banned Parekh from the securities market for 14 years due to his involvement in a 2001 scam.
- The capital markets regulator, in an order dated January 2, has restrained Parekh and Salgaocar from buying, selling or dealing in securities.
- It also has sought to confiscate unlawful gains earned from the alleged violations, which amount to Rs 65.77 crore.
Incident overview: Salgaocar was a consultant to the US fund referred to as the “Big Client” by Sebi. The fund’s traders consulted him before placing orders in Indian markets. He shared this information with Parekh, who, through a network of brokers, executed trades ahead of the Big Client’s orders.
New e-truck incentive plan may not have many takers
The PM E-Drive scheme, a demand incentive plan started last September to accelerate electric vehicle adoption, is likely to have only a limited impact on electrification in the truck segment, said industry executives.
Incentive barrier: A potential obstacle to the scheme’s success is that customers purchasing an electric truck must provide a certificate of deposit obtained after scrapping an old truck. However, those without a previous truck can still claim the incentives by using someone else’s certificate.
Expert take: “Based on our interactions with customers, electrification will become attractive in short to medium range, geo-fenced applications with suitable incentive structure and ecosystem support,” said Girish Wagh, executive director of Tata Motors.
Today’s ETtech Top 5 newsletter was curated by Blessy Reji and Vaibhavi Khanwalkar in Bengaluru.
