Space Tech Startups In India

Space Tech Startups In India

As the Indian Government has opened the space sector for private players, many startups are mulling to increase their research and development to take a lead in the market. Launching process and space exploration contribute only 10 % in the space economy, leaving the rest 90% of the space economy for private players to work on data analysis, ground equipment, and other services. Currently, there are 100 private companies working in space sector in the world. Let’s have a look at the recent government announcement and private space tech startups in India.

Crux of the Matter

The government has set up the Indian National Space Promotion and Authorization Center (IN-SPACe) to prompt the private players in the space sector, which will also help them grow and survive global competition. Going to be functional in a few months, IN-SPACe will look after a “friendly regulatory environment” for private space entrepreneurs. Now, private players will be allowed to access remote sensing data except for strategic remote sensing data. Moreover, private companies will be allowed to use ISRO facilities. Private players can start applying; their application will be accepted and studied on a case by case basis. ISRO will continue to focus on space exploration, innovation, and research and development.

Indian Space Tech Startups

Agnikul Cosmos
Srinath Ravichandra and Moin SPM founded Agnikul Cosmos in 2016 in Chennai. It designs & manufactures small launching vehicles. The firm uses 3D printers to develop cryogenic rocket propulsion. Agnikul Cosmos is focusing on the market of launching satellites up to 100 kgs. Pi Ventures, Speciale Invest, etc have invested in the company.

Skyroot Aerospace
Naga Bharath Daka, Pawan Kumar, and Chandana founded Skyroot aerospace in 2018 in Hyderabad. The company designs and makes space launch vehicles. It has developed Vikram series rockets with an aim to carry rockets weighing 250-700 kgs and others to low-earth orbits. Vikram rockets can be assembled and launched within 24 hours. Moreover, the company is working on making space airlifts cheaper. The company’s first launch is expected in 2021 at 1/3rd the normal cost. So far, it has raised $4.3 mn from Mukesh Bansal, Ankit Nagori, Solar Industries, and Vedanshu Investments.

Bellatrix Aerospace
Rohan M Ganapathy, Vivek Murugesan, Saagar Malaichamy, and Yashas Karanam founded Bellatrix aerospace in 2015 in Bengaluru. This firm makes propulsion systems for satellites and has started rocket designing to maneuver satellites via small engines. It has made an electric propulsion system that runs on water and is more eco-friendly than the one running on hydrazine fuel. It has also developed green fuel that is 30% more efficient.

Kshitij Khandelwal and Awais Ahmed, students of BITS Pilani started Pixxel in 2018. Pixxel is planning to set up a constellation of 30 satellites in low-earth orbit to develop high-frequency earth imaging capabilities. Its first microsatellite – a 15 kg cube – will be launched to low-earth orbit in November 2020. It has raised $681,000 from Techstars Starbust, GrowX, etc.

Blue Sky Analytics
Abhilasha and Kshitij Purwar founded Blue Sky Analytics in 2018. This Gurugram based company is planning to build a platform to provide real-time updates on air and water quality across India through an app. It has also launched BreeZo, an AQ data visualization platform.

  • Vikram Sarabhai was an Indian physicist and astronomer who initiated space research in India. He is internationally regarded as the Father of the Indian Space Program.
  • A P J Abdul Kalam was an Indian aerospace scientist and politician who served as the 11th President of India. He is known as the Missile Man of India for his work on the development of ballistic missile and launch vehicle technology.
  • The Thumba Equatorial Rocket Launching Station (TERLS) is an Indian spaceport established on 21 November 1963, operated by the Indian Space Research Organisation. It is currently used by ISRO for launching sounding rockets.

Viral Acharya Raises Critical Points For RBI & Govt

Viral Acharya Raises Critical Points For RBI & Govt

Former RBI Deputy Governor Viral Acharya in his latest book “Quest For Restoring Financial Stability In India”, says that fiscal dominance in India has become a mainstream practice that hinders the growth of banks and eventually results in the slow growth of the nation. His critical views on RBI’s functioning and the central bank’s relationship with the government have become the talk of the town. Let us simplify them and understand.

Crux of the Matter

Acharya on Fiscal Dominance
Viral Acharya is a former RBI Deputy Governor and currently a professor at NYU Stern. He has mentioned that Fiscal dominance is hampering the growth of India. Fiscal dominance is a situation in which the government has high debt and deficit. Because of limited funds, the government is unable to recapitalize public banks when they have to recognize bad loans in the books. Instead, the government pressurizes RBI to ease credit norms so that banks can avoid NPA recognition. This is like keeping the house clean by shoving al the dust under the carpet. Acharya said that it is not too late to infuse capital into banks and NBFCs.

On Non-Performing Assets
In an interview with India Today, Acharya said that growing NPAs during Covid-19 would be a concern. NPAs are expected to rise to ~12.5%, i.e. of the ₹100 loans given by a bank, ₹12-13 would be unrecoverable and banks will have to set aside a provision for the bad loan.

NPAs are loans that cannot be recovered. Viral Acharya also criticized the practice of evergreening of loans in India. Let us understand it through an example what it means and what are its implications:

Mr. A took a loan of ₹10 lakh but is now unable to pay back the principal amount and/or interest. Now, Mr. A may take an additional loan to pay off the interest, or principal and interest both. Banks allowed this practice because that particular loan would not have to be categorized as an NPA and hence, no provision amount needed to be set aside.

On RBI’s Autonomy
Acharya writes in the book that RBI’s autonomy was being compromised and hinted that he left for the same reason. Acharya left the post before the completion of his tenure. He also pointed out that Former RBI Governor Urjit Patel would have also left for a similar reason.

The government was trespassing on the autonomy of the regulator, rowing back on prudent measures and making unreasonable demands.

Viral Acharya, Former RBI Deputy Governor

Urjit Patel’s Resignation
Urjit Patel possibly resigned amidst the government trying to dilute the clause of Prompt Corrective Action. PCA is a framework under which banks with weak financial metrics are put under watch by the RBI. Besides that, the government wanted RBI to formulate policies to help it borrow more and ease up on defaulters. It also wanted the RBI to transfer surplus funds in the form of an interim dividend a few months before the 2019 Lok Sabha elections. All these factors might have caused Patel’s exit.

Also Read: Changes In RBI Accounting Year To Put Curbs On Contentious Interim Dividends

  • “Yaadon Ke Silsile” is a music album by Viral Acharya. The funds raised through the album were funneled into charity – Pratham – which works to educate children.
  • “The Third Pillar: How Markets and the State Leave the Community Behind” is a book by Raghuram Rajan. The book was shortlisted for the financial times and McKinsey business book of the year award 2019.
  • As of January 2017, Viral was appointed to serve a three-year term as a Deputy Governor of the Reserve Bank of India. He resigned from the post in July 2019 with 6 months left for his completion of a term.

Understanding REITs and Mindspace IPO

Understanding REITs and Mindspace IPO

Mindspace Business Parks Real Estate Investment Trust (REIT) announced to go public to raise a sum of ₹4,500 crores – the IPO closed on 29th July. Till now Embassy Office Parks was India’s only listed REIT. The concept of REIT was introduced in 2007 by the Securities and Exchange Board of India (SEBI). Before investing it is important to know what REITs mean and how do they function? Let’s understand it.

Crux of the Matter

What Are REITs?
There are plenty of investment options like gold, government bond, equity, debt, real estate, commodities, etc. Generally, real estate investment requires large sums of money to be invested for a long period of time – 5-10 years or more. The bottleneck with such investment is that if in times of need someone wants to sell this investment, it is not likely that it would be sold quickly and without incurring price reduction. So investors’ money remains blocked for a long time. However, REITs make real estate investment more liquid and affordable.

REITs were first introduced in the US in 1960. A REIT is a company that owns, operates, or finances income-generating real estate. REITs pool units of a portfolio of real estate assets and allow investors to invest in parts of it through stock or share in the portfolio. REITs’ stock derives value from its underlying asset, real estate.

What is Equity REIT?

  • Let’s say ABC owns 5 commercial office spaces in Bengaluru.
  • XYZ is a REIT that buys these properties from ABC.
  • For investors investing in XYZ’s REIT, their stock derives value from the value of the underlying asset, here ABC’s 5 commercial spaces in Bengaluru.
  • XYZ earns through the rent received and thus pays REITs dividends from it.
  • XYZ would be categorized as an equity REIT.

What is Mortgage REIT?

  • ABC owns 5 commercial office spaces in Bengaluru.
  • XYZ is a REIT that gave a loan to ABC to develop these spaces.
  • For investors investing in XYZ’s REIT, their stock derives value from the value of an underlying asset, here the performance of the loan given to ABC
  • XYZ earns through the interest received on loan and thus pays REITs dividend from it
  • XYZ would be categorized as a mortgage REIT

REITs in India
Investors get benefits from REIT as it is obliged to return a certain portion of the money back on a yearly basis to investors. More importantly, REITs’ dividends are not taxed in India. An investor gets a share in the profit earned through real estate investment. The minimum subscription limit to invest in REITs has been reduced from ₹2 lakh to ₹50,000.

Ending Note On Mindspace
Mindspace is raising money for the underlying asset of Business Parks in India. Experts say that at a time when Work From Home is becoming the new normal life due to Covid-19, Mindspace IPO is a wrong offer at the wrong time. However, the IPO was oversubscribed 13 times. Experts say it could be because investors demand such products for diversifying their portfolio.

  • The Irvine Company, LLC. is an American private company focused on real estate development. Its owner, Donald Bren, is the wealthiest real estate developer in the United States, with a net worth of more than $15 billion.
  • REITs were created in the United States after President Dwight D. Eisenhower signed Public Law 86-779, sometimes called the Cigar Excise Tax Extension of 1960. The first REIT was American Realty Trust founded by Thomas J. Broyhill, cousin of Virginia U.S. Congressmen Joel Broyhill in 1961.
  • A real estate bubble or property bubble is a type of economic bubble that occurs periodically in local or global real estate markets and typically follows a land boom. A land boom is a rapid increase in the market price of real property such as housing until they reach unsustainable levels and then decline.

Alibaba Dragged To Indian Court

Alibaba Dragged To Indian Court

Gurugram Court has summoned former CEO of Alibaba Jack Ma after a former employee of UCWeb filed a case against Alibaba for spreading fake news and censoring anti-Chinese news. However, Ma failed to show up in court. This move comes after India banned 59 Chinese apps posing a threat to national integrity and security.

Crux of the Matter

Case Against Alibaba
Mr. Pushpendra Singh Parmar, a former employee of Alibaba’s UCWeb filled a case against Alibaba in Gurugram court. Mr. Parmar said that he was wrongfully fired for opposing censorship and fake news on the app and accused the company of censoring content unfavorable to China. Moreover, the Company’s app UC Browser and UC News were showcasing false news “to cause social and political turmoil” in India.

The court had asked Jack Ma and the other 12 individuals to present themselves or through their lawyer on July 29th. The company and its executives were also ordered by the court to submit written responses within 30 days regarding this matter. However, Jack Ma did not show up not even through a lawyer. Only 5 people out of 12 were present through lawyers from a single law firm. The court is yet to give a final verdict and has given some time to all.

A 200-page filing was submitted to the court. It contained the proofs of spreading false news such as on “₹2000 note ban”. There was a “sensitive words list” which had been used to censor anti-China news.“Any news related content to be published against China was automatically/manually rejected by an audit system evolved for this purpose,” the filing said. There has been no official comment from embassies of both countries on the matter yet.

About Alibaba
Alibaba has emerged as a prominent B2B marketplace. B2B is a transaction between businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer – it refers to business that is conducted between companies, rather than between a company and individual consumer. Alibaba has created a platform to connect Chinese Small Medium Business(SMBs) and Wholesalers to a foreign client. Earlier, SMBs and Wholesalers had very limited access to the international market due to tight foreign trade rules in China. Alibaba solved these problems with its simple, fast, and convenient B2B platform removing all hardships. The company earns revenue by charging commissions on transactions.

A Short History of Alibaba

  • 1999: Jack Ma Founded Alibaba as a B2B eCommerce.
  • 2000: SoftBank and Goldman Sachs Invested US$25 million.
  • 2001: Surpassed 1 million Consumer base.
  • 2003: Launched Taobao Marketplace (B2C and C2C).
  • 2004: Raised $85 million and launched Alipay, an online payments platform.
  • 2007: Launched, an online marketing technology platform.
  • 2010: US firms Ray-Ban and Gap Opened online stores in Taobao Mall.
  • 2013: Jack ma stepped down as CEO, and Daniel Zhang took over.
  • 2014: Acquired mobile browser company UCWeb. The company went public and made history as the largest IPO of all time that opened on the New York Stock Exchange. It also became the world’s largest online B2B trading platform for small businesses
  • 2015: An investor brought consolidated class action lawsuit against Alibaba and the underwriters of its IPO for violations of the Securities Act. The company settled the matter by paying $75 million.
  • 2016: Office of the United States Trade Representative added Taobao onto a list of notorious counterfeit platforms.
  • 2019: Jack Ma stepped down as chairman of Alibaba.
  • Jack Ma retired from his 20-year tenure at Alibaba last year with a huge party and musical performance for 60,000 employees. Ma’s getup as a “rockstar” at the party went viral on the internet.
  • Daniel Zhang is a Chinese technology executive. He is currently the CEO of Alibaba Group. Before becoming the CEO, Zhang was best known for his roles as CEO of Taobao.
  • The company’s name came from the character Ali Baba from the Middle Eastern folk tale collection One Thousand and One Nights because of its universal appeal. Jack Ma thought of the name in San Francisco in a coffee shop.

A Look At India’s Cinema Business

A Look At India's Cinema Business

The government has announced Unlock 3.0 and plans to open gyms and yoga centres, but cinemas have not been given a green signal. On the other hand, prominent cinema chains in India released Standard Operating Procedures regarding what kind of movie experience the audience can expect in the time of Covid-19. Let’s have a look at the business of cinema and how it has been affected by Coronavirus.

Crux of the Matter

Cinemas To Not Open In Unlock 3.0
The government has decided to open gyms and yoga centres, however, educational institutes and cinemas have not been given permission to open yet. It is expected that respective state governments will take the final call whether to open cinema houses once the Centre gives a nod. Producers and directors such as Anurag Basu, Sudhir Mishra, and others have said that theaters shouldn’t be open till the vaccine is found, whereas R Balki, Anubhav Sinha, and others have said that theaters should be opened with precautionary measures.

Propose Operating Producer
Cinema chains have proposed Standard Operating Procedures (SOPs) for running theatres with precautionary measures. Theaters will screen movies with only 25-30% audience in the hall. Moreover, Arogya Setu would be mandatory for entering the theatre’s premises. Customer screening will be done and those having temperature of 100° F or more and/or with any symptoms of cold or fever will not be given entry.

The floor will be marked with spots 1 meter apart and sanitizers will be made available throughout the theatre. There will be a gap of one seat between viewers and interval timing will be extended to avoid crowding. Ultraviolet cabinets will be used to disinfect food servings. In addition to these precautions, the air-conditioning system will be revamped to pump fresh air into the theater.

How Do Cinema Houses Earn?
A Producer funds money for all expenses needed to make a movie including actors fee, promotion, and advertisement cost, etc. After the completion of the movie, produce sells the rights of the movie to the Distributors. Currently, there are 14 circuits in India and each circuit has its own “distributor representative”. These distributors sign agreements with theater owners. After signing the agreement theaters pay distributors on a weekly basis as per the agreement after deducting Entertainment Tax (different states have different entertainment tax). Once the distributor has received the sum, it disburses the share of theatre.

On average Entertainment Tax is around 30%. For multiplexes, the standard structure is this: the distributor gets 50% of what theatres earn in 1st week, then 42% of what is earned in 2nd week, then 37% of what is earned in 3rd week and then 30% fixed of what is earned from 4th week.

Emerging OTT Platforms A Threat?
OTT platforms are now bringing changes to the entertainment sector. Currently, there are 40 OTT platforms operating in India. The Indian film industry has suffered an estimated loss of ₹30 billion and the global industry has suffered ~₹750 bn loss due to lockdown. Time spent by the Indian OTT user base has increased from 20 minutes to 50 minutes per day during the lockdown. Theatres may become a luxury experience and experts say that the film industry can only thrive by integrating with new technology.

  • PVR Cinemas stands for Priya Village Roadshow. It’s a joint venture agreement between India’s Priya Exhibitors Private Limited and Australia’s Village Roadshow Limited.
  • Maratha Mandir is a cinema hall located in Maratha Mandir Marg, Mumbai. This cinema hall has a long-standing reputation and is one of the most famous landmarks in Mumbai. The theatre created a record after screening the movie Dilwale Dulhaniya Le Jayenge for 1009 weeks since its release in 1995, on 19 February 2015.
  • A drive-in theater or drive-in cinema is a form of cinema structure consisting of a large outdoor movie screen, a projection booth, a concession stand, and a large parking area for automobiles. Theatre de Guadalupe from Mexico was one of the first drive-in theatres.