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Back to Newsletter Vol 3, Issue 02, May 2021
Finance
Think and Learn Private Limited (TALPL) was founded in the year 2011 by an engineering graduate, Byju Raveendran (Raveendran), as an online educational service provider offering teaching services leveraging web-based technologies. In the year 2015, TALPL introduced the Byju’s app, an innovative online interactive education tool that created an interesting learning environment for students from the school going age to graduate students and for those preparing for competitive exams. The concept, scalability of the business model, and ever-changing educational environment in India and across the globe opened the doors to growth for TALPL, and attracted large scale investments from prominent startup investors across the globe. TALPL sponsored Byju’s went on to become a unicorn and then a decacorn, the first EdTech company in India to achieve the feat and the second of all the startups in the country after Paytm to do so.

Byju’s - Funding an EdTech Startup
The case study discusses India’s leading IT services company – Tata Consultancy Services Ltd. – becoming the most valuable IT services company in the world in October 2020, surpassing Accenture Plc (Accenture) in terms of market capitalization. This case is mainly useful in understanding market capitalization and various related concepts. It helps in understanding the significance of market capitalization, its determinants, and how to calculate market capitalization and free-float market capitalization of any public listed company with real data.

TCS: The Most Valuable IT Services Company in the World
On November 6, 2020, leading messaging app WhatsApp, owned by the US-based Facebook Inc., entered the digital payments ecosystem in India by launching its Unified Payment Interface (UPI) based mobile payment option, WhatsApp Pay. UPI has revolutionized the payment ecosystem in India with the interoperability feature that enables money transfer between different bank accounts. The UPI based ecosystem is dominated by Google Pay and PhonePe with a combined market share of 80%. WhatsApp entered the space with significant challenges in terms of restrictions on number of users and number of transactions.

WhatsApp Pay in India
Gopal was running a catering services business in Hyderabad in the southern Indian state of Telangana. He supplied food to college canteens, school canteens, office canteens, and private hostels. He also supplied food for events like marriages, birthday parties, etc. During the fourth quarter of the financial year 2018-19, Gopal started food outlets to cater to the food requirements of people in different areas of the city. Starting from a single supply contract in the year 2015, Gopal expanded his business significantly. He accepted orders, and made and supplied food through different channels, incurring cost at various levels. After launching the food outlets, Gopal wanted to understand the profitability of each food outlet and gain an idea about the costs incurred on the whole business process. The administrative unit of the business gave Gopal excerpts collected from the financial records of his business unit. However, he was unable to understand the cost structure. Though he had an idea about the costs he would incur, he could not find a logical way of dealing with the flow of costs.

Costing and Cost Sheet - Analyzing the Costs at Gopal Catering Services
The case study discusses the Initial Public Offering (IPO) of Equitas Small Finance Bank (ESF). Small Finance Banks are growing popular in the Indian financial markets as they cater to the underserved and unserved customer segment. The present case study can be used to discuss the scope of small finance banks in India, the IPO and its process and eligibility, the gray market and the gray market premium in the context of Equitas Small Finance Bank.

Equitas Small Finance Bank - IPO
The case study describes the underlying objective of Bharat Petroleum Corporation Limited (BPCL) in initiating the merger process with its subsidiary Bharat Oman Refineries Limited (BORL). It provides scope to discuss the concept of mergers and the features of mergers, share warrants, and convertible debentures and to learn more about commissioned deals in the merger process.

BPCL’s Buyout of Oman Oil’s stake in BORL
Meghna, a trader at Wellvet Partners, a financial services provider, needed to plan and implement option strategies for volatile markets. In consultation with Aruna, Senior Options Strategist, she planned to use Nifty March 2020 options to trade option strategies for volatile markets. India VIX (Volatility Index), a proxy of stocks return volatility traded on NSE, rose by 70% during the fourth week of February. This added to her confidence that the market was going to be volatile and Nifty would move by at least 10% in either direction in March 2020. However, Aruna warned her that the market could turn out to be stable instead and she should, hence, assign equal probabilities to volatile and stable markets while choosing an option strategy.

Options Strategies for a Volatile Market
The case study discusses the delisting attempt of Vedanta Limited (VL) by Vedanta Resources Limited (VRL), the majority shareholder and parent company of VL, the Indian subsidiary. The whole delisting process went through smoothly but due to issues like offer price and unconfirmed bids, VL’s delisting failed. The case discusses these issues as well as other issues such as unpaid dividends to VL shareholders and the sudden asset write-offs by the management of VL. The case follows the delisting process from the initial proposal to the final fiasco.

The Vedanta Limited Delisting Fiasco
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