Byju's is in more trouble and may lose Aakash; And why is the world besieged by freak weather?

Market Watch

• Indian benchmark indices ended the day in the green, with the Sensex increasing 273.67 points at 65,617.84, and Nifty gained 83.50 points at 19,439.40.
• Sectorally, Nifty Financial Services (-0.44%) and Bank (-0.26%) shed the most, while Auto (1.39%) and Consumer Durable (1.31%) gained the most.

Four things:

• Why did Foxconn end its semiconductor manufacturing partnership with Vedanta?
• Reliance Retail is now India's largest FMCG company, valued at more than $100 billion, surpassing ITC and HUL.
• The RBI may raise interest rates if rising vegetable costs push up consumer price inflation.
• The Tata Group is close to a deal to become the first Indian iPhone maker.

Is Byju’s about to lose control of Aakash?

In a major development, two independent directors of Byju's test-prep arm Aakash Educational Services Ltd - Amit Khansaheb and Vishruta Kaul (AESL) have reportedly resigned.

• The news comes amid reports that Byju's may soon lose control of Aakash.

Trouble at Akash: TMC reported that Byju’s is reportedly in talks with investors to dilute up to 20% of shareholding in Aakash for around $950 million in cash and stock.

• Should this happen, Byju's could lose the majority shareholding in the company as the combined stake of the new buyer, the Chaudhrys (promoters of Aakash), and Blackstone would be 50%.
• In May, Byju's raised Rs. 2,000 crore in debt from Davidson Kempner Capital Management, for Aakash, out of which they looked to withdraw around Rs 800 crore.
• But Davidson Kempner has now stopped the transfer of the remaining Rs 1,200 crore, because Byju's is believed to have given misleading information during the deal, stating that Aakash-Byju's digital business was part of Aakash, which was not the case.
• Kempner has reportedly stated that they will allow the withdrawal of the rest of the amount only after an audit of Aakash's books. If they choose to align with Aakash’s other stakeholders they too could edge Raveendran out. The whole saga casts a shadow on the purported mid-2024 IPO of Aakash.

Meanwhile, the Ministry of Corporate Affairs has now ordered an investigation into Byju's account books.

• This comes in the wake of some shareholders in the company recently demanding that CEO Byju Raveendran temporarily step down to make way for an interim CEO.
• The recent resignation of three directors - GV Ravishankar of Peak XV Partners, Russel Dreisenstock of Prosus, and Vivian Wu of Chan Zuckerberg Initiative - and Deloitte, Haskins & Sells, Byju's statutory auditor, all of whom cited differences with Byju's founder Raveendran, add to the company's existing woes.

Hi, I’m Gaurav Jeyaraman, the editor of this newsletter. We’d like to hear some feedback on our newsletter: what works and what doesn’t work for you? Drop me a message and tell me what you think.

‘Uncharted territory’: Freak weather engulfs the world as UN declares world’s hottest week ever recorded

The first week of July was the hottest ever recorded globally, building on the record-breaking heat of June, amid concerns about climate change and the developing El Niño weather pattern.

• The news comes on the heels of July 4 being recorded as the world’s hottest day ever.

Freak weather everywhere: In Canada on Saturday, the temperature soared as high as 100 degrees in the Northwest Territories - the hottest temperature ever measured north of 65 degrees latitude in the Western Hemisphere.

• In South Africa's Johannesburg, residents were pleasantly surprised on witnessing the first snowfall in the city in over a decade yesterday.
• Japan yesterday witnessed its "heaviest" day of rainfall ever, leading to landslides and at least 6 deaths in Kyushu.
• Heavy rains have triggered flash floods in New York's Hudson Valley today.
• Southern Iraq is experiencing its worst heatwave in 40 years, with a "devastating impact" on ecosystems, farmers, and fisheries.
• Meanwhile, the unusual monsoon deluge in North India has now claimed over 100 lives and caused damage worth over Rs 3000 crore; while over 86 people have died in Pakistan and hundreds of others are injured in monsoon-related flooding.
• Let’s not forget how Europe’s warmer-than-expected winter played spoilsport on Russia’s plans to leverage its gas-supply monopoly to get NATO to dissuade further aggression by Ukraine.

Why is this happening? The World Meteorological Organization (WMO) director of climate services, Christopher Hewitt, warned that more records are expected to fall as El Niño conditions develop further, with impacts extending into 2024.

• Another reason could be that this year, for the first time, the daily global temperature exceeded pre-industrial averages by more than 1.5°C in the summer months. This threshold has long been heralded as a point of no return.

A point to ponder: There’s not been a single year since 2013 when India hasn’t experienced extreme rainfall.

ICYMI

• Karnataka retains its position as the most expensive state in India for premium liquor brands, due to a proposed 20% hike in additional excise duty (AED) on alcohol.
• What went wrong in the unmaking of Vedanta-Foxconn’s chip dream?
• India has come in at #4 in the 2023 Global Military Rankings and lags behind only the US (#1), Russia (#2), and China (#3).
• The Delhi Police’s chargesheet has called for Wrestling Federation of India chief Brij Bhushan Sharan Singh to be “prosecuted and punished for offences” of sexual harassment, molestation and stalking.
• Elon Musk-owned SpaceX has applied to the Indian National Space Promotion & Authorisation Centre (IN-SPACe) to get approval to build earth stations.
• India and France are planning to sign key defence agreements for the potential purchase of new fighter jets and submarines for the Indian Navy during Prime Minister Narendra Modi's upcoming visit to France on July 13 and 14.
• Peru has declared a 90-day nationwide sanitary emergency due to an "unusual increase" in Guillain-Barré Syndrome cases.