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Rahul Mathur

@Rahul_J_Mathur

Aug 22

2007: HYD - Google’s 1st office in India
2010: HYD - Facebook’s 1st office in India
2015: BLR - Twitter’s 1st office in India

OpenAI’s 1st India hire is a Public Policy head and their 1st India office opening in New Delhi signals one thing:

Any global entity serious about AI in India will have to approach Public Policy / Govt relations in a formal manner.

Sam Altman has led on this front:

(a) He came to India in Feb ‘25 to discuss “OpenAI for Countries” with the Govt of India.
(b) In May ‘25 - OpenAI enabled local data residency for Indian ChatGPT users.
(c) Last week, OpenAI launched India focused pricing with ChatGPT Go

Unlike social media & ride hailing, AI has an upfront & clear public policy implication - no surprises here for the Govt; they're taking global & sovereign AI very seriously (e.g. the ₹10,300 crore IndiaAI Mission budget)

Today, OpenAI announced its 1st office in India will open in New Delhi;

Sure, you can argue that Google, FB & Twitter launched Indian offices in engineering hubs whereas Delhi is our capital city.

The wider NCR belt also has several Tech companies (Paytm, Policybazaar, Eternal etc) and the global MNCs have offices in NCR (e.g. Microsoft) - so this isn’t just a politically motivated move.

OpenAI is going down the same path as Google, Meta etc of localization - pricing is done, team will be built - it will be VERY interesting to see what product changes now happen given they are serious about India

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Rahul Mathur

@Rahul_J_Mathur

Aug 21

Indians paid ₹72,000 crore in toll charges last year - this is 2.5x the amount pre-COVID in 2019

When I checked my FASTag online - my family spends ~₹3,000 per month on the Worli sealink alone; other Mumbai residents might relate to this

Therefore, it shouldn't surprise you that 5 Lakh FASTag annual passes were sold in 4 days of launch by the NHAI - some frequent travelers have projected ~₹10,000+ per annum in savings from the pass.

But, there is one catch ⤵️

T&Cs apply - the Annual Pass does NOT work on ALL highways:

The Annual Pass ONLY works on National Highways (NH) and National Expressways (NE) operated by NHAI (National Highway Authority of India)

🚫Let us look at some popular exclusions:

(1) NICE (Bangalore - Mysore) Road is NOT included since it is operated by a private group

(2) Bandra-Worli sea link is NOT included since it is operated by Govt of Maharashtra

(3) Atal Setu bridge is also NOT included - same reason as above

🟢And, now at some popular inclusions:

(1) NH 44 (North–South corridor, e.g., Srinagar to Kanyakumari)

(2) Mumbai–Nashik Expressway

(3) Ahmedabad–Vadodara Expressway

So, when does this make sense?

Inter-state commuters & road trip enthusiasts stand to benefit the most from this Annual Pass

(a) You can use the Rajmarg Yatra app to find the toll exempt routes from your location to your destination

(b) If you do BLR-Kochi or BOM-Goa by road frequently (e.g. once per month) - the savings of ~₹300 to ₹400 will add up very quickly to make it a good / cost efficient purchase

(c) My relatives who stay in Ghatkopar are most excited by this - since they drive the Mumbai Nashik corridor almost twice per month - equates to ~₹5,000 saved. Similar calculation works for Surat - but that drive is 6 hours (yikes!)

The thumb rule would be: the Annual Pass would make sense IF you make 1 or more inter-state commute per month.

Read 6 tweets

Rahul Mathur

@Rahul_J_Mathur

Aug 16

After more than a decade, India is getting a new bank - AU Bank - this is a HUGE moment for our banking sector.

It comes at a time when legacy banks are switching focus to premium customers - ICICI Bank has raised its minimum balance requirement to ₹15,000 and HDFC has raised it to ₹25,000

For the 1st time, a Small Finance Bank (SFB) is set to become a Universal Bank

Sanjay Agarwal, the founder of Jaipur based AU SFB has been on a 29 year journey from a loan distributor to NBFC to SFB to (soon) Universal Bank

Here’s how they created history ⤵️

Firstly, let us get this out of the way: SFB means Small Finance Bank, but AU SFB is NOT small!

AU SFB has a MCap of ₹55,000 crore - which puts it ahead of several legacy banks e.g. Federal Bank (₹48,000 crore MCap) and Bank of India (₹50,000 MCap)

It is valued almost 9X its closest SFB peer - Ujjivan SFB (around ₹9000cr MCap)

Sanjay Agarwal, founder of AU SFB rightly said: ”Coming from a humble background in Jaipur, if someone had told me that we would build the largest small finance bank in India, I would have found it hard to believe. Yet here we are—because I dared to dream and followed my passion.”

Sanjay’s journey is inspiring:

At the age of 26 , Sanjay Agarwal, a CA Gold Medalist from Jaipur realised it was not his forte to continue as CA so, he chose to get into the lending business - which was a common career option in Rajasthan.

(i) Being a 1st generation entrepreneur with zero capital - he convinced five people including his uncle to invest ₹10 Lakhs to start “AU Financiers” - A distributor of loans for second-hand vehicles & for small businesses which were primarily ignored by large banks in 1996.

(ii) In 2002, HDFC Bank appointed ‘AU’ as their channel partner in Rajasthan. That 5 year partnership was the turning point in his life

(iii) In 2007, despite being turned down once before, Sanjay got a ₹20 crore cheque from Motilal Oswal’s 1st PE fund (500cr).

Motilal bent their rules here: Their mandate was to invest only in companies with a minimum trailing profit of ₹10 crore; AU barely had ₹2 crore of profit.

The 10 yr investment fetched a 13X return when MO PE I cashed out before AU SFB went for an IPO in 2017.

Which bring us to WTH is a ‘Small Finance Bank’?

Read 7 tweets

Rahul Mathur

@Rahul_J_Mathur

Aug 15

YouTube has 49 crore active users in India who consume an average of 29 hours of content per month.

If you’re not watching YouTube - you’re probably scrolling Reels (32 crore Indians are active there) or binge watching Netflix (300 crore hours of Indian content were consumed last year!)

The last time I visited a cinema was ~2.5 years ago; as a child - I would be going twice per week & wait in a long line at the counter to buy a good seat for a Sunday show

Here’s how OTT is silently killing India’s ₹12,000 crore cinema industry ⤵️

(1) Start with revenue - Box Office collections are flat

In 10 years, collections have grown at 3.5% CAGR - slower than inflation.

The best data source is the annual Box Office report from Ormax Media

You can see how pre-2018 (i.e. pre OTT going mainstream) - Cinema had a steady growth rate.

Then came the COVID slump

Now, has come the realization: Why go to the cinema when the same movie is coming on OTT in less than 60 days?

(2) Next: We should understand where/how Cinema makes revenue (hint: not from movies)

Ajay Bijli, CEO of PVR Inox, said: “I have seen customers come only for food, leave without watching the movie”

Data:
Avg ticket price at PVR = ₹259 (versus ₹180 in 2015)

F&B spend per head at PVR = ₹134 (versus ₹70 in 2015)

But, here’s the kicker - F&B has a 75% gross margin i.e. it is a real money maker

Let us look at PVR’s FY 25 financials:
Total rev from Ops = ₹5780 crore
Ticket sales = ₹3530 crore
F&B sales @ 75% GM = ₹1800 crore
Advertising @ 90% GM = ₹450 crore

F&B + Ads = ₹1750 crore of margin - which is the same as tickets sales @ 50% margin 🤯

Takeaway: On a margin basis - F&B & Ads contributes as much as ticket sales. Hence, the old joke that cinemas are expensive restaurants which play movies and have bad service. 😂

Read 8 tweets

Rahul Mathur

@Rahul_J_Mathur

Aug 8

We’ve officially opened our 1st office in GIFT City 🥳

Last week, our team drove for 4 hours from Udaipur to GIFT City - in many ways, it reminded me of Dubai in the early 2000s (when I used to visit my father)

It was incredible to see the pace of construction and how crowded some of the other offices were on a Saturday afternoon!

Sharing a few insights on GIFT City ⤵️

Let us start with some facts & figures:

(1) $5.7bn of AUM has been raised by funds (AIFs) operating out of GITY City

(2) ~700 entities have set up office

(3) Famous investment firms like Abu Dhabi Investment Authority (ADIA), Bandhan Asset Management Company (AMC), Unifi Capital, 360 WAM etc have set-up offices

Btw, 360ONE WAM and Alchemy Capital are located on the same floor as our office in GIFT City

So, what is GIFT City?

GIFT City is an area located between Ahmedabad and Gandhinagar in the state of Gujarat

As you drive from Ahmedabad airport towards GIFT City - you will see a cluster of office towers, residential complexes & construction sites which is the “physical” location.

You can think of it as a SEZ (Special Economic Zone) to promote international investments in & outside of India.

GIFT City has an IFSC (International Financial Services Centre) which allows Indian and foreign entities to transact in foreign currency-denominated financial products and services.

Although GIFT City was conceptualized in 2007 - the real action began in 2020 when IFSCA was created - as the single regulator for GIFT City

Let’s now understand the hype behind this:

Read 6 tweets

Rahul Mathur

@Rahul_J_Mathur

Aug 6

Mahindra Group has announced a ~₹500 crore one-time ESOP grant to 14,000+ factory & shopfloor workers.

This is the 1st time in India where a Diwali bonus is being paid in stock!

And, this is the 2nd time where a conglomerate has allocated such a generous ESOP grant to blue collar workers - JSW Group was the 1st to do so in August 2021 with a ₹1,000 crore allocation!

ESOPs were earlier restricted to management & white collar roles - but this is now changing; here’s what you need to know ⤵️

First, let us understand how ESOPs work:

(1) ESOP stands for Employee Stock Ownership Plan

(2) ESOPs are a way for a company to incentivize you to stick around for the long term - they typically are granted over a 4 year “vesting period”

(3) To create long term alignment - there is typically a “cliff” (i.e. if you leave within one year, you get no ESOPs) and there is a “vesting schedule” i.e. every month or quarter - you get some credited some ESOPs

(4) Every ESOP has an “exercise price” i.e. the amount you pay to convert your ESOPs into shares of the company

(5) The difference between the exercise price & actual share price is the upside or financial incentive for the employee

In the context of Mahindra Group’s 2025 Diwali ESOP - any worker with more than 1 year of tenure (”cliff”) is eligible.

JSW’s ESOP plan has a 4 year vesting schedule - 25% per year at the end of each year where the “exercise price” of the ESOP is ₹1 - the current share price of JSW Energy is ~₹535

To put it simply - ESOPs are stock based compensation for employees - and this has worked out spectacularly for white collar employees in India:

In 2021, when Freshworks went public in the US:

(a) 500 of its employees had ≥ ₹1 crore from exercising their ESOPs

(b) 70 of these were under 30 years of age - some even a few years out of college

Girish Mathrubootham, founder of Freshworks said: “Employee wealth creation is something that India needs to do more of. Wealth has to be shared with people who created it… It’s not just for the founders to get rich or the investors”

ESOPs in the case of listed companies like M&M and JSW Group is quite simple since the stock is freely traded.

But what about ESOPs in private companies?

Read 8 tweets

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