The Zomato Story
(Excellent write up, am just sharing)
TRADING OF LOSS - NEW PARADIGM
Company X accumulated losses of over Rs 4,600 Crore
Incurred Loss of Rs. 106.9 Crore in 2018
Loss of Rs. 1000 Crore in 2019
Loss of Rs. 2400 Crore in 2020
Loss of Rs. 800 Crore in 2021
Loss of Rs. 350 Crore in 3 Months Apr to June 2021
Aggregating Total Loss of Rs. 4600 Crore from 2018 to 2021 June
With these Losses continuing to mount high, they managed to stand on their feet from 2018 till Today.
Strange that it is not a year-old Business nor having previous years of accumulated profits that can set-off their current and future Losses. Hence it is quite evident that Net Loss is funded by Capital and Debt.
But why do the Investors keep pumping the fund in the Startup even when they see no Profit in 4 years.
If the Business was running on Loss
Q) Were the Employees not paid ??
Answer is No, They were paid handsomely
Q) Were the Customers forced to Pay the high amount ?
Answer is No, they were instead given Meals at high discount
Q) Might the Founders and Top Brass were taking less Perks ?
Answer is No
Founder Basic Salary was Rs. 3.50 Crore
Co-Founder -Gross Remuneration was Rs. 3.70 Crore
CTO 1.50 Crore
CFO 3.26 Crore
Q) Any Income Tax
A: Since the Company was running at a loss, there is no Income Tax payable
So who was bearing the brunt of Heavy Loss ??
The Answer is the Investor of X Company having stakes in the company.
It is obvious that the Loss of 4670 crore is funded by External Investor
So isn't it the Existing Investor of X Company at Loss?
How does this External Existing Investor gain if the Company is running Loss ??
Now here is the trick.
There is a Trading of Loss.
What If I tell You that Loss can be sold at a Profit??
Yes that is possible.
Investors (Top 5 Investors were holding around 50% Stake) who pumped funds into this startup have already had their funds eaten up by the losses.
Yet in the books they held Numbers of Share and % of Stake.
VALUATION- The Talking Point
Now, The Company went for Independent Valuation by a Valuer
The Valuer valued the Loss Making Company for Rs.60000 Crore !!! Strange but true.
With this Valuation, the Company went for IPO. That means they are going to list their Shares in the Stock-market making their Shares easily accessible to the Public to Purchase, and sell further.
Strong Advertisement, Endorsement by Some Experts, News Channels, Social Media, etc created such a hype in the market of forthcoming IPOs that it gave the impression to every Stock-market Trader of a Cake 🎂, that no one was going to give a miss.
With such a Marketing, Valuation and Expert Endorsement, IPO got oversubscribed by whopping 38% with Listing priced at Rs 116 which was Valued at 72-76 (which itself was questionable)
The interesting point was that Company X went for IPO for Rs. 9400 Crore, Out of Which only 400 Crore was only pumped into Company, Rest 9000 Crore was Part of Offer for Sale by Existing Investor.
(Did anyone notice that Subscribing to IPO means purchasing Shares from existing Investors which generally people are reluctant to do, as they are more interested in funding the company than buying such shares from existing Investors.)
That means out of 9400 Crore subscribe and funded by Public in the form of Rs. 116 share, first 9000 crore will go to the Early Investors.
Now here we go !!!!
Who are these Early Investors ?
These are the same people who funded the loss making Company and now they sold their stake at higher profits.
Now the Value of Share of Early Investors is 1010 times higher than when they purchased the share at first.
So, for 4700 Crore Loss Making Company, everyone was paid more than their worth
- Employee
- Customers
- Founders
- Top Management
- And at Last and at Higher rate - The Investors
So who is now Handling the Loss ?
Yes, WE Public holding shares of X Company !!!
Right.
The Loss has been passed on from the Top 10 Investors to the Public at a Profit ranging from 60 to 1010 times !!
This is the Stock-market for You !!!!
And, a new way of making money.
CREATE A VALUE PERCEPTION, and NOT VALUE.
Sell the DREAM and not PERFORMANCE.
PROFIT is history.
Market Valuation is the way to make money.
தினமும் morning assembly முடியும் சமயம் நிறைவாக தேசிய கீதம் பாட வேண்டும்.
பாதி பேருக்கு வல்லின மெல்லின பிரயோகங்களில் இடியாப்ப சிக்கல்.
ஆனாலும் கோவில் மணி அடிப்பது போல் வாய் மணக்க #ஜன_கன_மன' என்று ஆரம்பித்து #பாரத_பாக்ய_விதாதா' என்பதை ‘பாரதி பார்கவி தாத்தா‘ என்று கன கம்பீரமாய் பாடும் ஜோர் இருக்கு பாருங்கள்…வீர ரசம் ததும்பும்!
மீதி பேர் நமக்கேன் வம்பு என்று வெறும் வாயை மட்டும் அசைப்பார்கள்.
ஆனால் சும்மா சொல்லக் கூடாது. சிவாஜி கணேசன் rangeக்கு வாய் அசைப்பார்கள். அப்பொழுதுதான் பழி தீர்க்கறாப்பல டீச்சர் பக்கத்தில் வந்து காதை தீட்டிக்கொண்டு நிற்பார்... "நீ நிஜமாகவே பாடறயா இல்ல சும்மா பாவ்லா காட்றயா" என்று தீர்மானிக்க.
A good lesson I'm #trying_to_learn and at times not able to practice and/or implement it, especially here in twitter
Shall we see why?
When you enter any Siva temple, you will observe some devotees silently sitting, praying, and meditating in front of the idol of Lord Dhakshinamoorthy, facing South. He is an incarnation of Lord Parameswara.
He is known as Mowna Guru, the popular silent Teacher of Hindu Vedantha, not having His equivalent in any other religion. He is the personification of supreme, ultimate bliss, awareness, understanding and knowledge.
ஒரு நண்பரை பார்க்க பெங்களூர் ஹெப்பாலில் இருந்து கோரமங்களா சென்றேன். அந்த நண்பர் ஆறு மாதங்களுக்கு முன்பு அவரின் அலுவலக முகவரியை எனக்கு ஒரு link மூலம் அனுப்பியிருந்தார்.
அதை வைத்துக்கொண்டு அந்த இடத்திற்கு சென்றால் அங்கே அவரது அலுவலகம் இல்லை. அவருக்கு call செய்தால் switched-off or temporarily out of service என்று வந்தது.
என்ன செய்வது என்று கொஞ்ச நேரம் அங்கேயே நின்று கொண்டு இருந்தேன்.
அப்போது அந்த கட்டிடத்தில் இருந்து வந்த ஒரு இளைஞன், "ஐயா உங்களுக்கு என்ன வேண்டும்?" என்று விசாரித்தான்.
நானும் என் விஷயத்தை சொன்னேன்.
அவன் சில விவரங்களை என்னிடம் கேட்டு... உடனே தன் மொபைலை எடுத்து... என்னென்னவோ தடவித் தடவி அந்த அலுவலகத்தின் தொலைபேசி எண்ணை கண்டுபிடித்து