MC Insider: Market players, corporate bosses ditch WhatsApp for Signal or Telegram, paint stocks on fire, banking buzz, insurance jolt and more

Parts of Dalal Street are slowly but surely reacting adversely to WhatsApp's recent announcement of tweaking its privacy policy to allow deeper and more granular access of its users' data to parent Facebook. Three very senior investors in the fund management space, managing billions of dollars of public money, shifted allegiance to rival messaging App Telegram last week. And many more deep-pocketed players are in the pipeline. Many feel let down about this impending move in February. It's common knowledge that thousands of WhatsApp groups hosting millions of investors are fuelling this record rally in India. These groups host traders, investors, researchers, media personnel and raw newcomers. The hottest topic of discussion is a choice between Signal and Telegram. One fund manager at a global insurance player said even web-based calls were shifting en masse to Telegram. Clearly, whether or not market participants have secrets to hide, Signal and Telegram are the new messaging darlings on Dalal Street!

And if the markets have shown the way, India Inc can’t be far behind now, can it? The head of a leading steel major joined Telegram over the weekend. So did a senior sarkari official working in the Finance Ministry. Mahindra Group top boss Anand Mahindra announced to his 8.3 million Twitter followers that he had installed Signal. At least two other head honchos of diversified conglomerates can also be now found on Signal, one a consummate dealmaker and the other one known to be extremely low profile. Ditto with the scion of a metals and mining group. Three premier legal eagles are on the encrypted messaging app as well, one a famed counsel and the other two the founding partners of tier 1 law firms. Even the head of a regulatory body has warmed up to the messaging app. WhatsApp may have clarified that the new rules of the game affect only business account users and critics indicate that on achieving massive scale, the likes of Signal and Telegram will also go the WhatsApp way, but clearly private individuals in corporate India are keen to keep their options open for now. And the list seems to be only growing bigger.

Here’s a classic case of making hay while the signal, oops, sun shines! When you receive an endorsement from the world’s richest man , you are bound to get noticed. That’s exactly what happened in the case of Signal Advance Inc, an obscure, sparsely traded firm from Texas in the health-tech segment. When Elon Musk advised his Twitter followers last week to “use Signal”, he meant the messaging app but investors mistook him, leading to shares on Signal Advance spiking up by a whopping 600 percent in two days. The company’s market cap escalated to $660 million from a mere $55 million! Ultimately, the ‘Signal’ Musk meant, was forced to issue a good humoured clarification and distance itself from the Texas company. By the way, American whistle-blower Edward Snowden is also a firm backer of Signal. The mother of all ironies is the fact that the co-founder of Signal, Brian Acton, is also the co-founder of WhatsApp, which he quit in 2017 over differences with Mark Zuckerberg.

Amid accusations of unjustified price hikes by steel and cement makers (the straight-talking Union Minister Nitin Gadkari minced no words on this subject during a recent VC interaction), there’s a section on the street that believes the former will escape unscathed. This is because, even as domestic prices track global trends, industry composition is a crucial factor which can’t be ignored. The contention is that you can’t point a finger at others when there are four pointing back at you. Here, it is important to note that many in the industry take pricing cues from a primary state-owned player. What’s more, there’s also a large integrated player owned by the Centre. So a stricture against private enterprise on profiteering through price revisions can be countered with similar motivated actions by the state. Now we are left scratching our heads — it means the government will take action against itself!

Nobody knows for sure, but everyone loves to speculate on the Union Budget every single year. Especially when Finance Minister Nirmala Sitharaman has piqued the curiosity of one and all by saying a ‘never before’ like budget is on the cards. Some in the banking industry have a secret wish this time—get on with the idea of 'bad bank' at least now. Bad bank, or a place where all NPAs can be shifted conveniently for good, has been debated and discussed for long, but has never seen the light of the day due to lack of consensus. We hear bankers want it even more desperately this time since COVID-19 linked stressed assets are likely to surface sooner or later once the effect of all the temporary measures (moratorium, loan restructuring) fades away slowly and actual stress reflects on books. The feeling is that unless the current stock of bad loans are shifted out of bank balance sheets, banks will have to prepare for an NPA double whammy. The stakes are high, especially for the top managements of weaker PSBs. So will the government listen to the 'bad' idea this time and unleash this ultimate weapon for the clean-up act? Let’s wait and watch!

After a few years of playing cupid, a desi dating venture has finally fallen out of love, both with its backers and users. First, let’s talk about its investors--a mix of high-profile Indian angels and foreign VCs—who have refused to pump in more money, leaving the business on the brink of closure. Love, they have realised, doesn’t come cheap. More than enough cash has been burnt, paid subscribers have not inched beyond a minuscule few and the firm’s prospects are not exactly rosy. A pandemic year—2020—made matters worse. Two-thirds of the headcount was slashed and the leadership team was changed. If the inspiration for our desi Cupid was to copy the business model of a famed foreign venture operating in India, the kindergarten lesson was forgotten: never forget your tiffin box. The MNC has enough cash to sink into the guzzling business. The second set of woes is equally serious. Female users are almost conspicuous by their absence; and even the handful on board are facing harassment as registered mobile numbers have got leaked! Even the age profile of the male users looks outdated—late 40s and early 50s. In short, this desi boy got his date horribly wrong. Sigh!

Deep-pocketed circles are accumulating Shalimar Paints. Why? Two factors actually. One, the impending blockbuster IPO of Indigo Paints has put the spotlight back on the booming home decorative sector. Two, with Asian Paints and Berger Paints already at record highs, naturally, the attention of market participants has shifted to smaller listed players in the niche sector. Shalimar, on its part, has relatively underperformed its larger peers and offers an attractive entry level because it is still trading in double digits.

A high-ranked economist in the Modi Sarkar who is a black belt in Taekwondo and a sports buff, does not mince his words when rubbed the wrong way, on court or outside it. He recently slammed a leading overseas publication for “biased reporting” and this time an Asian sports equipment company was at the receiving end of his rant on social media. “Dear Yonex, please look at the quality of your AS 2 shuttles. I ran through in one hour. If they cannot stand a smash from a middle-aged economist, what happens when a pro hits it,” he said. Ouch!

Along with health workers and the cops, bank employees had also risked their lives during the peak of COVID-19. Especially during a phase when public transport was not available and the spread of infections was high. A large number of bank employees suffered from infections too. PSB banks had given informal diktats to many of their employees to report for work despite the high risk of the pandemic. On the other hand, private banks had offered the WFH (work from home) option to a majority of the staff. Despite all this, bankers ask—why are we not being counted as COVID warriors and awarded a place in the priority list for vaccines? Upset bank employees plan to take up this demand officially. In fact, one of the prominent bank unions has already written to the PMO requesting to include them in the priority list for vaccines whenever the drug is made available in the country. We hear that bank employee unions are planning to push this demand more aggressively in the days ahead. A genuine demand. What say, folks?

Life insurers are in a fix as the regulator IRDAI has come up with a fresh directive. The watchdog now wants these firms to also list their ‘expected loss of rating’ for infrastructure investments. These insurers, many of whom have seen multiple defaults in this sector, are at their wits’ end. How should they go about giving future rating expectations for current investments? A likely impact of this exercise could be companies pruning their exposure to the key infra sector. ​That would be a pity now, wouldn’t it?

Contract staffing in IT may have seen an upward trend on the back of COVID-19. But not for this IT major’s banking client. Employees working at a major US-based banking client were released from the project recently after completing their contract. In cases where contracts are renewed, the time period for the contract has come down sharply from the usual one year to 3-6 months. While finding a project might not be too much of a concern, in uncertain times such moves have created doubts over job security. Why this move though? Employees say this move could primarily be driven by data sensitivity of banks as more employees work from home. “You see we were contingent employees. So now when risks of security breach are even more with WFH, banks are trying to reduce the risk by reducing contractors,” an employee added.

With the digital platforms having been brought under the ambit of the Ministry of Information and Broadcasting, most of the talk has been around censorship rules applying to the likes of streaming sites, and the possibility of interference in the operations of online news portals. However, there is likely to be a previously unavailable benefit for the latter. We hear government is planning to issue press information bureau cards for digital journalists as well. Provide them with accreditation in other words. So far, these were allotted only to print, TV and wire journalists covering various ministries. Apart from allowing easier access to ministries, these cards also provide other amenities to accredited journalists, like cheaper rail travel. The problem that I&B officials face is that unlike newspaper circulation and TV viewership figures, there is no way to verify the readership of digital portals from an independent agency. Hence the decision to issue PIB cards is being delayed as they are allotted on the basis of those figures.