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OYO Raises $1.5bn, Govt Clears Way for Privatisation of Bharat Petroleum, Yes Bank Share Price Rises c. 8%

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 7, 2019 12:43 PM 4 min read

Govt. Mulls privatization of BPCL. OYO to raise $1bn in new funding round. Yes Bank share price jumps as reports of stake sale surface. Budweiser looking to enter China. French President says Brexit decision could come this week. Japan and South Korea’s trade war could affect the world.



Govt clears way for privatisation of Bharat Petroleum. Share price falls 7% intraday.

Private Petroleum: In 2016, the government had annulled "187 obsolete and redundant laws lying unnecessarily on the Statue-Book". One of these was the legislation that had nationalised Bharat Petroleum Corp Ltd (BPCL) in 1976, thereby clearing the way for its privatisation. The government is reportedly looking to sell most of its 53.3% state to a strategic partner, a disinvestment that could get it upwards of INR60,000cr and shake up the state-dominated fuel retail sector. Livemint
BPCL – previously Burmah Shell – has a market capitalisation of c. INR 1.07 lakh crore. Possible buyers of a stake in a company that controls 25% of India’s fuel marketing could include Saudi Aramco and Total SA. But the privatisation news was not received happily by markets: BPCL’s shares fell c. 7% intraday today. Moneycontrol


OYO Raises $1.5bn, Govt Clears Way for Privatisation of Bharat Petroleum, Yes Bank Share Price Rises c. 8%



OYO to raise $1.5bn in latest round of funding.

Raking Up a Little More: Hospitality firm Oyo Hotels and Homes is set to raise $1.5bn in latest round of funding. ET Rise

As part of the Series F round, Founder and CEO, Ritesh Agarwal will invest $700mn as he looks to buy more shares in the startup. The remaining 800mn will be injected by existing investors SoftBank Group, Lightspeed Venture Partners, Sequoia India, valuing OYO at a whooping $10bn.

The proceeds from the financing round would be used for expansion in the US and strengthen its vacation rentals business in Europe.

Indian hotel operators push back against increased fees.

Crying Foul: Meanwhile, back home, Indian hotel operators are pushing back against increased fees levied by the platform. 

OYO charges hotels roughly 20% franchise fee on room revenues when hotels join its network. However, off late, some Indian hotel operators have complained that OYO ends up taking half or more of revenues through fees that were not initially disclosed. Livemint



Yes Bank share price rises as global private equity firms eye stake in the lender.

Light at the End of the Tunnel: As per a report by The Economic Times, global private equity firms, including TPG, The Carlyle Group and Farallon Capital are seeking to buy large strategic stakes in Yes Bank.  According to another report, Yes Bank is in talks with three top technology companies, including Microsoft to onboard one of them as a strategic shareholder as part of the bank’s strategy to get fresh capital infusion. 

Yes Bank share price surged over 8% on the back of the news. Previously, Yes Bank shares had crashed over 22.8% last week, following news of heavy selling by investors following allegations of fraud against a housing finance company that Yes Bank has exposure to. Financial Express

We Shall Overcome One Day: Amidst all this, Yes Bank CEO and MD, Ravneet Gill in an interview with the Business Standard said that he was confident that the bank will be able to come out of the present crisis and maintain its guidance on cleaning up its books and margins. BS


OYO Raises $1.5bn, Govt Clears Way for Privatisation of Bharat Petroleum, Yes Bank Share Price Rises c. 8%



Budweiser eyes markets in China and Southeast Asia, where local brands rule.

Pitcher Perfect: AB InBev might have scored the year’s second-biggest IPO after its listing in Hong Kong last week, but its road ahead might be more than bumpy. The world’s largest brewer is keen on expanding in Asian economies, particularly in China and Southeast Asia. But local beers and local flavours dominate these markets, making AB InBev’s job a difficult one. In China, its market share is 16% (third place) while across Southeast Asia – like in Vietnam and the Philippines – it is hardly even in the top 10. CNBC

How Tim Cook built a working relationship with Donald Trump.

An Alliance of Opposites: Tim Cook supported Hillary Clinton in 2016, championed Apple’s outsourcing strategy, and is one of the world’s tech tycoons. Donald Trump is a Republican, has rallied against American companies outsourcing labour, and has waged a war on big tech since the day he took office as President. These two very different men, however, have an understanding between them, a working relationship that has, among other things, convinced Trump to exempt electronic products from tariffs and propelled Apple to move manufacturing increasingly back to the US. WSJ

Boeing vs Airbus is now US vs Europe.

Storm Clouds Over the Atlantic: The US recently said it would impose tariffs on a swathe of European goods – including wine, olive oil, cheese and aircraft. While tensions between Brussels and Washington have become more and more pronounced of late, the $7.5bn tariffs mark the largest-ever authorised relataliation in WTO history. But US vs Europe has its roots in a more private, more brutal, more long-running feud – in Boeing vs Airbus.  NYT



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