The Tremors Ain’t That Bad, But The Economy Has A New Demand Now

Photo by Adeolu Eletu on Unsplash

It’s natural to have mixed feelings about the domestic economy at this juncture. 

Despite expanding at its fastest pace in nearly 22 years in 2021-22, the Indian economy grew sluggishly in Q4 ending March. 

The culprit? A decline in the manufacturing sector due to the Ukraine war, a rise in commodity prices to their highest level, and slow growth in services due to a fresh Omicron wave this year. 

In another, the Securities and Exchange Board of India (SEBI) is at the outset of launching something new for the sake of Indian startups.

Losing Steam

We saw it trickling. 

The Q1 (April-June) GDP growth was at 20.3% and finally touched 4.1% in Q4 – the lowest among all 4 quarters. This pulled down the GDP growth in the full fiscal 2021-22 to 8.7%.

However, the slowdown was less pronounced than what was projected. The 22-year high bettered our forecasts of 3.5% and was 1.5% higher than the level in FY20.

Rollin’ In Something Special 

The capital market regulator, SEBI, has readied its framework on Special Purpose Acquisition Companies (SPACs), which started off in the making last year. SPACs will enable the listing of startups on domestic stock exchanges.

Think of it as India’s own version of a “blank cheque company.”  SPAC has no commercial operations but is formed strictly to raise capital through IPOs. Its purpose is to acquire or merge with an existing company. 

Keep Your Eyes On The Ball

Edtech giant and one of India’s most valuable startups, Byju’s, is in talks with Churchill Capital to raise $4 billion and go public through the SPAC route. The round, if successful, could more than double its valuation to about $48 billion. 

Too long? Here’s a one-liner: GDP grows 8.7% in FY22, with Q4 ending only at 4.1%; SEBI kicks off the SPAC framework, and Byju’s is already set to avail it.

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