The Indus Valley Report 2024 Explainer | Sajith Pai | Anurag Pagaria | Nachammai Savithiri

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The Indus Valley Report is our take on India and the Indian startup ecosystem, through different lenses to sensemake the Indian startup ecosystem. Indus Valley’ is our moniker for the Indian startup ecosystem. The report is 132 slides long, divided into two sections, India and Indus Valley. It has about thirteen different subsections, each covering a different part of India’s story, chock full of charts This video is a companion guide that you can refer to in order to better understand the charts and the story behind them. In the video, Sajith Pai, Anurag Pagaria and Nachammai Savithiri walk you through each part, highlighting what each section covers, and why they think it is important.

Link to the report — https://​bit​.ly/​i​n​d​u​s​v​a​l​l​e​y​r​e​p​o​r​t2024

Nachammai: Hi, everyone. This is the Indus Valley annual report team from Blume Ventures, an early stage venture capital firm here in India. Before we dive deeper into our report, let's do a quick round of introductions to the team. Starting off with Sajith Bhai, the investment partner here at Blume who looks at all things consumer tech and India B2B.

We also have Anurag Pagaria here who is looking at all things India B2B and he's an associate with the team. This is Nachami. I also go by NS and I look at all things consumer and consumer tech, and I'm an analyst with the team. For those that are new here, a quick introduction to our report itself.

The Indus Valley Annual Report is a yearly reportage taking stock of everything that has happened in India and in the Indian startup ecosystem, or our moniker for it, the Indus Valley ecosystem. So think Silicon Valley, but Indus Valley to pay homage to the civilization's genesis. This report is one hundred and twenty something pages of India's story expanded through charts, data points, narratives, and every now and then contradictions.

The purpose of the report is to make sense of India, and the colorful startup ecosystem that the country has, which is unlike any other in the world, with its elements of Jugaad, its different founder types, and its diverse consumer base. For those that are no stranger to the Indus Valley report, this is a new format that we're exploring.

and it is essentially to serve as a companion video guide as you walk your way through the Indus Valley report itself. So without further ado, this is Blume's Annual Indus Valley Report 2024 Deconstructed. 

Anurag: So we're actually doing 120 slides. 

Sajith: Yeah, we are, yeah. We're going to take the audience through them.

Maybe not, yeah. 

Nachammai: I think it's only right for Sajith to kick this off. over to you, Sajith. Hey, 

Sajith: yeah. Excited to have you both this time. and, on this annual, Indus Valley Annual Report. Um, so we began by looking at the Indian GDP story. And, uh, it, India has been one of the bright stars of, uh, the global firmament and, uh, if anyone was worried whether the Indian story would continue, worry not, it continues well.

That said, uh, you know, when you look at, for example, uh, the Indian growth rate and one of the things we found was that, uh, Indian growth rate now averages 6 percent and, uh, we've kind of, uh, made a remark to 6 percent being the new. Uh, 4% and 4% was this Hindu growth rate that an economist called Krishna Raj used.

So, uh, so 6% is the new Hindu growth rate. Uh, and why Hindu? I don't know. . Uh, yeah, so, so, so that, so, so that was an interesting piece. It's still well below 9% that China enjoyed, uh, for, uh, uh, you know, all through the, uh, all, all through the last four decades. So we still have some way to go. That said, uh, you know, uh, one of the things we did was we unpacked the Indian GDP into, uh, its constituent parts.

And instead of looking at, for example, um, the traditional ways to look at, say, industry, uh, through agriculture services, we actually in terms of consumption and investments. And there, something very interesting emerges. The way the Indian GDP is structured, uh, you know, it's very different from the way China evolved.

India has a very high share of consumption. And, uh, unlike China, it's, it's almost one and a half times China's as a percentage unit. Then we try to look at why this is so, and, uh, and which is what brings us to the GFCF section, Gross Fixed Capital Formation section, which is just one way of saying investment, but fundamentally talks about productive investment.

A gross fixed capital formation is the investment into say bridges. Um, uh, for example, ports, airports, any productive asset, right? And, um, all of you talking about, uh, you know, all of you, uh, kind of seeing the entire infrastructure story. And if you're in Bombay, where we're recording this, the infrastructure development of the last 10 years has been incredible.

But actually, when you look at the numbers, right? We punch well below our weight. So when you tease India's GDP apart by consumption and And investment here, we specifically use the word GFCF, which is crossed fixed capital formation, just nothing but investment into productive assets. Uh, we noticed something very interesting.

We noticed that India's consumption is a very large share and that pretty much drives India's GDP as much as 60%. Just one and a half times what Chinese consumption drives as a percentage of the GDP. Uh, now we'll ask why this is so, and, uh, I think a lot of it is to do with the fact that, uh, it's pretty much how the Indian economy has evolved.

Historically had very low, uh, GFCF, uh, as a percentage of GDP. Uh, barring the years 2007 to 13. Uh, it's, it's, it's never been higher than 30%. And for those of you, uh, who've been surprised by that, because looking at the pace of infrastructure investments over the last few years. And, uh, in fact, if you're in Bombay, you'll wonder if that number is even true because the entire Bombay story has been that relentless investment into infrastructure, right, with the coastal road and that will say to and come.

But actually it is low, uh, uh, and, uh, whereas in China, uh, GFCF, which is productive assets like roads, bridges, airports. It's well above 40%. Uh, so this has been a trend that, uh, uh, is, is, is something that is worth noting and has actually important implications. When 

Anurag: you say that we are looking at through a GFCF lens.

I remember us doing a lot of work looking at through agricultural lens, three different ways that we started looking at GDP. Why did we decide or why did we choose to look at it from a only GFCF lens? And second is that, uh, Is high GFCF a good way for an economy to grow or is that a wrong way to put it?

Sajith: Yeah. One reason why we decided to look at this particular deconstruction of India versus China, uh, is because it explains a lot more than a simple deconstruction like GDP by industry. agriculture, uh, and, uh, services. Uh, well, that's important. Uh, this actually is a far more powerful way to kind of understand.

Uh, and as we see with the GFCF section, you will see the various implications a low GFCF and the ways to correct it are creating. Um, so, so, so, so certainly, uh, what was your second question, Anurag? Uh, essentially 

Anurag: why, if we have high GFCF, is that the, is that a good thing? So when you're saying India has always been around 30 percent range and China has been around 60, close to 60%, is there some principle that you should be high in GFCF or essentially like that, or is that not a right way to look at 

Sajith: it?

Well, uh, I would say that it is good to have a certain, a certain ratio. Now in China, which is well above 40%, the challenge is GFC financed and, uh, financing it is through debt. So whoever is financing it, typically if he has to over invest into GFCF, they have to finance it through debt. And so those are the fundamental challenges.

Or you have to finance it through taxes. Okay? In a developing country, there just isn't enough tax to finance a GFCF. So, the fact is, uh, if you have a very high GFCF, like if it crosses 50%, then the next question to ask is, how are you financing it? Like, you know, and that has implications for the economy too.

Right. Got it. So, um, that's a good question from Anurag. Now let's just come back into financing, since financing was a key question. Uh, financing is interesting because fundamentally GFCFs is low because, uh, uh, We under invest into a productive assets. Now who under invest is very interesting. In India, it's typically the private sector under invests.

Okay. And what we have seen real last decade is private sector share of, uh, of, of GFCF has actually come down by a third. It's also true for, uh, uh, the larger corporate sector as well as true for what the SMB sector, which is typically referred to as households in this exercise. So, so, this is, this is certainly one factor.

As a result, the government has had to stay steady, right, else, uh, and, and over the last, uh, few years, what's happened is, uh, the, the, the private sectors actually reduced its borrowings. Uh, and this is a result of many factors, including, uh, NPA crisis. fairly high capacity, uh, that they've had and they've not really had to invest.

The COVID uncertainties, all of them have led to private sector under investing and this reflected in their share of debt coming down. Like, you know, private sector share of debts actually come down to 50%. It's one of the lowest amongst our peers. So that brings us to something very interesting, uh, which is that the government steps in to spend.

Okay. And the government's had increased spending as we have all seen. And, uh, with the government increasing spending, now it comes down to how does it finance that spending and which is, which is sort of the point you raised. And it's very interesting. We don't have very high taxes. Uh, and India's story of tax is very interesting.

Uh, uh, our tax as a share of GDP hasn't really grown much over the last few years. And a lot of it has to do with the fact that we under collect on direct taxes to a much greater degree. Okay. Uh, the, can you deconstruct tax? Yeah, so tax is called direct and indirect. Yeah, and uh, direct is really Uh, either corporates or individuals are paying directly for it.

Okay. Uh, indirect taxes when you and me pay taxes, but through GST, there are also related tax like excise, et cetera, which is, which is really on, uh, by a specific person or entity, but, but, but it's spread across multiple people. Uh, typically, um, if you have a very high indirect tax, typically. More lower income folks share the burden.

So it's a little inequitable in that respect. Uh, yes, to a certain extent, you pay taxes on consuming, but fundamentally, because incomes are much, you know, as a percentage, it's much higher. Yeah, right, right. Now, now direct taxes are typically more equitable in sense, if you only have income, you'll pay for it.

But the story of India is that direct taxes haven't really grown much. They're pretty much at 6 percent of, uh, over the, uh, over the last few years, they haven't really grown much. It's just that corporate taxes have come down as a percentage and income taxes have gone up. And what's really interesting when we unpacked was a very few, uh, uh, very small number of Indians pay income tax.

Um, um, just 1.5% of India. It's 22 million people. And, uh, that surprised me, uh, because there were a lot of filing, uh, uh, going filing has been going up, but Ping hasn't been going up. And, uh, and uh, the other thing is the power law, where a third, uh, but fifth. Of these account for pretty much 70%, 80 percent of the taxes.


Anurag: so that's the 70 million number that floats around is not actually No, 

Sajith: it's actually filers. Filers. Yeah, yeah. Thanks for clar asking that and clarifying that. It's actually filers, not payers. Uh, so, now we come to the, the, the, the, possibly the final, uh, part of GFCF. That, uh, because taxes are low, you tend to, uh, uh, borrow.

And when you tend to borrow, uh, what happens is, uh, as a government share of borrowings go up. And if you look at the India's corporate bond market, it is pretty much, uh, India's bond market, sorry to say, it is dominated more by the government borrowing than corporate bonds, uh, unlike other countries, for instance.

So because the government has a very big role in the bond market borrowing, there is. debate. And now I'm not saying it's conclusively proven. Uh, there are well written arguments on both sides that the government may be crowding out, but I've also read enough interesting literature to say that they could be crowding in that's happening at this stage in India, which is that as a government spends more money and economic activity increases, there is more, uh, you know, private sector investment and doesn't necessarily crowd out, but crowds in.

So I think this is What do you mean by that? Crowds in? Crowd, crowd in is that when, for example, uh, in Atal Setu, for example, in Atal Setu. In Atal Setu means that the government, uh, kind of takes that burden. It finances it through borrowings. And, but the construction on both sides leads to a revitalization of the economy.

And as a result, a factory on the other side may choose to set up a large plant. Okay. And when it sets up a large plant, it then chooses to borrow. So that's a crowding in. So, so, so that is the argument that is used in favor, I think it's a, it's a fair argument. And at this point, I don't have, I haven't done enough to say is decisively one versus the other.

So that is sort of the look at GFCF and the reason for picking up GFCF, you know, and, and consumption later will become clear to you because GFCF allows us to unpack so many dimensions of the economy. Um, uh, and, and, and, and, and so, so very, uh, simply. Are we under invest in GFs? Why do we under invest in GFCF?

Private sector does. So government shoulders a burden because the government can't tax as much or doesn't tax as much. We have more borrowings and more borrowings lead to Uh, discussions about crowding out or crowding in. So that is the GFCF section in a nutshell. Okay. So, uh, now the GFCF is kind of unpacked.

Uh, we need to look at the other part, which is the other large part, which is as much as 60 percent of GDP is driven by consumption. 

Anurag: But the fun, the best chart I think was the fact that when we talk about GDP, right? We are 3 trillion, we are X, then we look at GDP per capita. And then we come at 140th rank.

Okay. And I'm like Wow. How can you be like, how can you be two things at the same time? How can you be the fourth biggest economy? And also so back in per capita kind of a thing, that's like, an India thing. More 

Nachammai: of that will come in 

Sajith: consumption. This is sort of, I would say the canonical statement about India.

Whatever you can see of India, the opposite is also true, is what I've heard. And I think you've kind of raised the right point, which is about per capita. And, uh, Nacho, I think should cover a little bit more about the implications of that on consumption. Yeah. So why don't you take 

Nachammai: over Nacho? Yeah, Anurag, I mean, the duality of India is sort of a great place for us to, you know, move into consumption, uh, the consumption section of the report.

So, um, if we actually go back to our earlier thought about breaking down GDP into its many constituent parts, the largest one that we'll see there is private consumption. Um, and interestingly, in the last couple of decades, this has always been as high as it is now, right? 58 percent and above, and now it sits at about 60%.

So, I think it's important for us to break down, um, the various components of consumption and really understand what is India consuming, what is India spending on.

So, um, a good way to look at it is spend on necessities and on discretionary spend, right? Um, and interestingly enough, India is spending significantly on your necessities. Um, discretionary is about 21 percent. Um, and Sajith actually did a breakdown of this using MPC data, um, and went very, like, went into the trenches, uh, and uncovered that at max, this is probably 29 percent today.

Discretionary spend, right? What does it mean? Yeah, um, I am actually going to let Sajith do this because he spent many hours on this. Yeah. So, um, yeah, Sajith, go through how you broke down the consumer survey. No, absolutely. 

Sajith: So we got the slide ready and, uh, then, and I think the slide got ready about, uh, I think about nearly two, three weeks back and then you don't revisit the slide.

And then I saw the tweets about India's new consumption survey. And all of a sudden, I could think I got messages from I think one of you, I think maybe Nacho saying is, do you want to just revisit this slide? And then in the last minute, that was another one and a half hours of work, trying to see, you know, do we need to change the slide?

Is there a lot of new data? But actually, no, reassuringly for us, but not so reassuring for the Indian people, uh, are spent on discretionary. Which is really the what's called value added consumption, right? Which is a spending on for example Uh, like like designer clothes or not even designer clothes slightly more expensive stuff, right?

or or going out, uh, and and having having like eating in restaurants the spending has uh, Not perhaps 70 percent of the economy Uh, so what I did was I actually looked at the monthly per capita expenditure data. Okay. And the government released it after 10 years. Okay. So, uh, 22, 23 data. Uh, and, and what I did was I looked at all the constituent spends and they divided into food and non food.

Uh, and the various break, uh, uh, subheadings of that. So what I did was for the food, uh, uh, there's a specific interesting part about processed food spending, which is 10 percent in urban India, which is interesting. So that I, again, I give certain weights to it as discretionary, non discretionary, teased it apart.

Then for example, there is non food, which is footwear, et cetera. So, uh, per the government, 46% of rural India spends are on, uh, food and 39% of urban India spends are on food. And there was, uh, and, and, but when you actually non-food, a lot of it is still, uh, like medical. Mm-Hmm. education. Just essentially conveyance, con conveyance.

A certain percent of conveyance is for getting to work. Correct. Right. So it's essential. Mm-Hmm. . Without that, your money won't come. So when you actually tease those apart, you actually find that. 29 to 30%, 29 percent is what the share of discretionary income discretionary spends. I apologize in India is today and from 2000 it has really grown up by 800 bips.

That is in 2000. It was 21% in, uh, 2022. It is 29%. When we look at what there on our chart, which is from the Macy, uh, uh, uh, investment bank. Macy says 2000 was 13% and 2022 or 23 was 21%. Right? So it's again, 8 8, 800 bips, uh, change. So this is sort of, uh, the dissection that you wanted me to do, nacho. Back 

Nachammai: to you.

No, I think interesting from the consumer survey as well was when we look at pure discretionary spends like your consumer durables, your media and entertainment, that was broadly about 15 percent of the discretionary portion. Um, and interestingly, um, you talked about beverage and processed foods, right?

Um, What I found very interesting about the survey was both rural and urban India spend about 10 percent of their household income on beverages and processed food. And we were actually having a discussion about this. And it's also because things like your noodles is actually a staple in the household while it's processed.

Sting has become a staple. 

Sajith: Um, so 

Nachammai: I think that was a very fascinating juxtaposition as well. Um, and that's why your sort of further break of some of these discretionary components into both necessity as well as discretionary is I think, um, an interesting sort of angle to go about it. Yeah. Thank 

Anurag: you. But why is discretionary important?

Sajith: I would say discretionary is important, Anurag, because it is, uh, uh, it is the part that actually drives the economy forward. Like if you all spend only on necessities, uh, then, uh, all of the beautiful things like, uh, you know, uh, your Onitsuka tiger sneakers to your Zara, um, kin of clothes and all of that, uh, is discretionary.

You don't really need it. Yeah. Right. But that's increasingly what drives the economy forward. So when you look at advanced economies. The share of discretionary is much higher. It's actually inverted because the incomes are so high. So in a way, uh, it's actually interesting you say that discretionary is important, uh, not because discretionary spending is all, yes, it matters in driving the economy forward because actually higher margins in the hands of people, et cetera, all of that.

But it's also a great signal to where the economy is. Discretionary as a percentage. Can't increase unless the incomes go up. Yeah. Okay. Uh, so why don't we kind of get Nachu to kind of unpack this a little bit more? Yeah. 

Nachammai: So, um, when we actually broke down discretionary spend a little bit more, um, we wanted to look at other indicators for low discretionary spend.

And we realized India is actually under consuming in multiples. A chart that I really like here that we explored was elevator density in India. Right? It's one of the lowest in the world. Um, which is interesting because you have a limited landmass and you have a very large population. And elevators are usually in urban parts.

And it really tells you how small The, um, urban classes in India, uh, and also shows you that urbanization is not where it ideally should be. Right? Um, I think this is a really interesting, uh, chart from that perspective. Another one is also the household goods, um, and ownership of household goods in Indian households.

Um, two wheelers at about 50%. Um, but a car at 8%, right? That's interesting. That's at a household level at a household level. Yeah. Um, similarly with ACs, we don't have pure AC data if I'm not wrong. We have ACs and coolers, and that's at about 24 percent in India. I think these are great charts to really understand the many India's right.

Um, and sort of segwaying from that, uh, we really, um, drill down into. These indicators to identify what is the size of or what is the percentage of households in India, um, that are the consuming class, um, or at least a premium, slightly premium consuming class, right? Um, all, all roads and all our indicators like to one number.

Um, broadly between 30 to 35 million. Um, and I think, um, you know, we've looked at taxpayers, we've looked at, um, mature internet users. We've looked at car ownership, um, credit cards, DMAT accounts. Yeah. Whatever data we could find goes back to 35 million. Yeah. Um, it's, yeah, it's, it's, uh, that was, I think something that came out very strongly here.

Um, and of course, this then leads into, um, the hallmark sort of, um, um, slide that everyone looks forward to in the Indus Valley report. This Blumes rendition of Kishore Biyani's India 1 2 3. Um, and of course, Sajith has been the brainchild behind, you know, our segmentation of India 1 2 3. Um, and I would love for him to sort of walk us through this.

Um, and you know, um, also notice subject that some of the estimations this year are different from last year's. So what's changed? Um, and how has this come about? 

Sajith: So, um, when we look at, uh, in the India one, two, three framework, uh, it is a concept that I think should be any pioneered in this book. It happened in one India.

It happened one, it happened in India. I think that's the titles. Uh, yeah. So, um, that's where I came across the concept of India one, two, three. And I thought it was a very powerful way to kind of, uh, illustrate India. What I've done, um, and, and, and is really adapted for the needs of Indus Valley. And, uh, which is why the India one, two, three framework and the depiction that I do, uh, is, it's not a pure socioeconomic depiction, right?

It, it, there's a reason why I pick, for example, uh, India one, why size that way. Uh, and it comes from, for example, all of the numbers that talk about 25 to 40 million, 30 to 35 million being in between, right? Effectively, that many number of people and a slightly lesser number of households equivalent, okay, um, really set the outer boundaries of the consumption class in India.

And, uh, credit cards, 100 million ish credit cards, but With everyone having 2 to 2. 5 credit cards, it's just again 30, 40 million, 40 million people. Cars, similar and so on. Very interestingly, the data that you brought out, Anurag, about people have done at least one trade. 25 million, 22 million. It's dropped a little bit this year apparently, but 25 million last year.

So, so, so hence we have sized India 1 at that because that becomes really the consuming set. That's a set which is digitally literate, uh, uh, able to transact comfortably in the internet, mature internet users, let's say put it at 35 to 40 million, again, similar. Uh, that is also, uh, fits in and also has a kind of affluence to buy.

So that becomes like the native class for Indus Valley startups to go after, right? That's where you begin. Um, then comes India too. And India too, for example, and not sure you spoke about what's changed and you notice that some tips have changed. Yes. We have expanded the size of India too. And the reason for expanding the size of India to last year, I kept it at about 100 million.

And again, like I said, India, this framework is not a socio economic framework. This framework is to give us the next set of users were in this valley startups to go after. And this time I expanded it because Various factors lead me to presume that the aspirational class has expanded in India, thanks to digital.

Uh, incomes have not grown as much, but there's willingness to spend has gone up. And we're beginning to see that in the new wave of Indus Valley startups. Uh, who, for example, are seeing a lot of microtransaction incomes, whether it is Dreamlevens of the world and the gaming companies to, for example, Stage in our portfolio, Cuckoo FM, they're all beginning to see India 2 users willing to spend.

So, while incomes haven't gone up, Their willingness to spend on these products has gone up because the ticket sizes are very small. And so this unlock convinced us, convinced me rather, that, you know, I think it's time to kind of expand this. So India 2, uh, doesn't mean that a lot more people have entered the middle class.

No. The middle class, as we call it, is really the rich class in India, which is India 1. India too is an aspirational class. And so we expanded this to show so that the market has expanded. And so that is how we've kind of stacked it up. But otherwise India one, uh, if anything, the story is that India one's numbers have grown slowly.

Okay. That's about 30 million households, close, uh, close to 10 percent of the economy, uh, of, of, of India's households. And they account for about, I would say, Just over 50 percent of, uh, this, uh, the, the, the, the income. Okay. Uh, and, uh, and, and equivalent, maybe a little bit more on spends. So that's, that's India one.

If anything, India one has got richer. India two has kind of stayed the same, maybe a little less because I've added more numbers to it from the bottom. Okay. So India two would have gone down a little bit in income, an average income, and India three would be a little. A little more lower because the top rung of India 3 are pushed into India 2.

So, so, so that's, that's sort of the India 1, 2, 3 framework. Uh, and, uh, what I think we've done is to give you an indicative set of startups, which kind of fall, uh, in each of these buckets. Uh, but the way to understand is when you look at the startups, keep in mind that all India 1, uh, all India 1 startups may not be relevant for India 3, right?

Or India 2, but India 3 started to be relevant for India 1. So that's, that's a way to understand it. It doesn't mean that YouTube doesn't operate in India 1. All it means is that they kind of spans all of 

Nachammai: this. Yeah, I think we're also seeing that with some of these India 3 or India 2 Um, products having that premium version for that India one customer, right?

Um, even YouTube with YouTube premium, for example. 

Sajith: Right. YouTube premium and YouTube in India has had to kind of adapt itself. India is one of the few countries that allow downloads. Because when YouTube launched in India. Till 16, till Jio gave us those speeds and, and the bandwidth, uh, people, uh, couldn't kind of reliably enjoy YouTube.

So India is one of the few countries that allow downloads. Uh, and, and, and yeah, so WhatsApp for instance, uh, when, um, and, and, uh, had to disable the number of forwards. You could send it to, because in certain situations, uh, rumor mongering was on the rise. And, uh, so India is a very interesting country where not only are there like premium versions like YouTube premium for India one and all, they also had to adapt the product to to kind of, uh, reduce, um, misuse and to increase use.

So, so, so that's the interesting thing about that, but that's a different topic. Entirely. 

Nachammai: Um, and something you mentioned, which was really interesting was this, um, you know, uh, billingness. to pay now, uh, in India too. Right. Do you think this is coming from an increased access to credit coming from aspirations?

Is it coming from just time in the market for some of these products? 

Sajith: Yeah, I would three points. I think the second is less relevant, uh, for consumption, okay, of these digital products. Um, I would say that, uh, unsecured credit has been on the rise and that's it. That's it. That's it. That's it. Next topic will probably kind of segue to soon.

Uh, but I would say that, uh, as far as consumption of digital products is concerned, I don't know if that's as relevant, but the first two that you said is more, uh, this one, that one, there's been, these products have been in the market for a long time and they've discovered new unlocks with behavioral. As well as economic, uh, and, uh, the economic one, interestingly is also technological because UPI, autopay and UPI allows you small ticket items Yeah.

To be kind of, uh, uh, uh, uh, uh, small ticket prices. Yeah. And, and that means that people are paying for like nine rupees, one rupe, and, and that's created an entirely new set of unlocks. Got it. Yeah. 

Anurag: Yeah. And one very interesting thing that I find about all India 1, 2, 3 is the way you correlate with countries.

Like, instead of looking at India as India, you say that India 1 is equivalent to Mexico, India 2 is equivalent to Indonesia. Why do you think that's a, that's a way to look at it? 

Sajith: Yeah, I think it's supposed to make it simpler to understand. And I, I, I keep wondering whether, uh, you know, uh, uh, India 1, for example, is Mexico because So for that population, that was the closest in income I could find, right?

For that income, that was the closest in population I could find. India too, I think it's harder sometimes. It's sort of a combination of Indonesia plus Nigeria, I think. Like sort of the population of Indonesia, but the incomes of Nigeria perhaps. But when I struggle to find an exact analogy. Uh, and I feel like there are, uh, interesting countries hidden within, within India, one is, I think, uh, possibly one.

It's 25 million people and 35, 000 per capita income. And, uh, that is sort of people like all, people like us, for example, those who have Starbucks and are watching Netflix and whatnot, okay? So there are these worlds hidden within, uh, you know, so, um, yeah, I think, uh, 

Nachammai: back at you, Nachu. And, um, on that, uh, we actually have two very interesting sections in the report where we've taken some thought leaders is further segmentation of India 1 and India 2, which I will, uh, let you explore in the report.

Um, and, okay, so we essentially talked about how India 1 is driving much of consumption and to some degree India 1 is also getting richer, um, and. An indicator for this, uh, which has been a hot topic in the last couple of months is premiumization. We're also seeing this consuming class essentially grow over the last few years, right?

Um, and we've sort of explored that, uh, in this particular chart, where if you see in around 1956, Um, it was about 0. 8 percent of Indian households were the consuming households. Now this has grown to 8 percent of Indian households. So this is certainly on the rise now. Um, we're also seeing some of, um, these reports sort of talk about the affluent class.

The middle class is also growing now, which is great indicators that sure you have a small consumption class, but at least it's growing to some degree, which is good news for our Indus Valley players. I 

Sajith: just want to come back, come here and say that one of interesting, not contradictions, but, uh, kind of.

Uh, two different opposite concepts have to sit in mind in India, you know, always like, like highest GD, fourth highest GDP or fifth highest GDP at 140th. Similarly, a small minority, 10 percent of India is really the consuming class, but that small minority at 120 million people is bigger than many European nations.

So, so, and, and they are driving a lot of, uh, expense, uh, and it's, it's really, India is really the fastest growing category for many kind of categories. So that is really the two things that you need to keep in mind, while it's 10%, it's still really sizable. Yeah, 

Nachammai: yeah, um, and you know, we've also looked at some of this.

Um, some of the indicators for this growing consumer class from our end, right? We looked at growing DMAT accounts, uh, increase in broadband subscriptions. Um, we've also seen within categories, premiumization, right? For example, we looked at, um, the revenue growth for say a Vmart versus Azara in India in the last three years, um, or Mahindra and BMW in India, right?

Um, and all of these are strong indicators of. within this consumption class that you can actually get more from your consumption. Um, and economists are really calling this the K shaped recover for India, right? So you're seeing entry level in categories on the decline in sales, but premium brands on the rise.

Um, for example, entry level vehicles right on the decline, but SUVs now have 42 percent market share in car sales. I think. Super interesting here. Um, yeah. And, um, another one, uh, Apple is about to overtake HUL, uh, revenues in India, right? Um, so a lot of, um, aspiration, a lot of premiumization is happening every day in India.

Anurag: think that's a very good way. The whole car thing seems to be very intriguing. The entry level vehicles are going down. The five to 10 lakh vehicles are going up. And two wheeler sales are going down. So entry level two wheeler sales are going down. So that essentially shows you what you are saying that the richer are getting richer and the poor are getting sort of poorer in many ways.

It seems very interesting to 

Nachammai: me. Or maybe the messy middle is aspiring for a lot more now, right? Um, so we've sort of looked at how India is spending, right? Uh, something else on the rise is India's. Um, investment habit. Um, so I'll, I'll let you take over Anugag now to sort of talk about what's happening in our equity markets.

Anurag: So one thing that I find very interesting when we talk about Indian equity or Indian investing thing is that while the world has the world in the last two years, because of, uh, interest rates going up, all emerging markets. It's draw down or basically, uh, didn't do well. India did really well. So that, that was very, that, that was a question, like, why did India do so well?

Why has Indian stock market performed so well? So I think broadly, when we start looking at where the money is flowing, we see a very clear pattern that FII's or the foreign institutional investors, when they, when they scaled back, when they took out money, the domestic institutional investors went in with more money.

And that is very interesting when you think now, uh, historically, FIIs were always higher than DIIs, I'm calling a short form because why would I say always the longer version, but essentially what has happened is that DI has for the first time surpassed FIIs also in certain ways. So if you look at the 

Nachammai: ownership, When did this happen?

Anurag: It is happening in the last four, five years. Got it. Five years has been crazy. For the Indian equity markets and the retail participation. I think it's broadly retail story. When you look at Indian markets, Indian equity markets, uh, it, look, let's, let's, if you look at the FI ownership over the last 10 years, it has broadly remained stagnant of the market.

So basically it's 18, roughly 18%. But let's look at DIA's ownership. It has increased from 3% to roughly 9%. Of the overall stock market free floating stock market. So essentially 3x in 10 years and that's massive when you look at terms of three four four Trillion dollars, so that's massive in that ways.

So broadly now, what is dii? So dii is basically a combination of mutual funds epfos and insurance now Mutual funds is the majority of it and when you look at mutual funds, why has that performed? Well, you Uh, try and you look and see everywhere where you ask your friends, where you talk to them.

Everybody has started doing SIPs. SIPs has been the backbone of Indian equity markets. Not because there's money flowing in, there's a systematic money flowing. It's sort of like a subscription. Sort of a way that every month there's some money getting debited. I do an SIP and almost everybody that I talk to This is also 

Nachammai: like when we talked about UPI auto pay, right?

Yeah. This systemized 

Anurag: Systemized investing has helped create a shoulder, created a, uh, shoulder in terms of how much money is flowing in. So coming back to numbers, right? So household value of mutual funds that has doubled over the last three years. So what was 145 billion has become 290 billion right now.

And SIPs inflows purely on dollar terms. It has gone from 6 billion in financial year 2017 to now roughly about 19 billion. And I think that's increasing. So what I read last was India mutual fund 50 trillion rupees, which was about 8 trillion 10 years back. And that's, that's the story of what has happened in the Indian equity markets per se.

Uh, then, and then obviously when mutual funds do well. You also see that retail investors are participating more and more. And there's a IPO frenzy sort of a thing. So the one very interesting one was where there was around 2, 58, 000 crores logged in for 7, 000 crores worth of Uh, IPO stocks. So that's the amount of oversubscription that is happening.

And this is also causing a lot of, uh, the, and you can see it in multiple ways, a number of BMAT accounts, but also an active way of looking at how many investors are participating. So what was earlier 4 million, roughly investors on NSC in FY14 become around 25 million in FY23 and said to also surpass that in this FY24.

Um, which is very interesting or intriguing sort of a way. And all of this brings us to the one question and one question that everybody has, and I asked Sajith so many times, is Indian market overvalued. Right. And there are multiple ways of looking at it. One way is that, uh, if you look at MSCI index or sort of an emerging market index that us uses, uh, where it tracks all emerging markets, India has done the best in last five years, 10 That's like in this century, India has been the best emerging market.

And you're comparing to China, Korea, uh, Indonesia, Taiwan, all of those countries. Uh, the MCAP to GDP has gone from 80 percent to 120%. And the valuation premium of simple way to understand is that average valuation to current valuation is the highest amongst it highest in the last 18 years. It's even higher than us for that matter.

So yeah, you could see that we are some sort of overvalued. I would also tell you to look at NVIDIA, Google or Microsoft of the world, and where Microsoft is at 3 trillion, but the Microsoft and Apple interchanged between 3 trillion, essentially. So these are almost as equal to Indian market. So I don't know whether we are overvalued in many ways.

I don't have an answer to it, but I think the broader story is the SIP story that has caused Indian equity to rise. So, uh, basically, uh, when we spoke about equity, that is how India is saving, but is also in some ways, there's one more part to it about credit. And credit, why is credit interesting? Because in a very boring topic, like, why do you want to discuss about loans, credit, all of that?

But I think there's a very interesting thing that is happening in Indian ecosystem right now. And broadly, if you look at credit, right, so there are three parts to it, retail, government, and corporate. Now, the retail segment of credit is going through a transformation. And so retail broadly consists of personal loans, credit cards, home loans, all of those things constitute the retail credit bunch of it.

Now in retail credit, what is happening is that personal loan has increased about 2x in the last five years. And that's massive when it comes into the loan book kind of a way that 3 percent of personal loans was 3 percent of the overall credit was personal loans in 2018. Now it has become 6. 7%. Now that might not sound very big, but now if you dig deep into personal loans, what you will realize is that amongst that personal loans have increased 12x in volume.

What we used to do 8 million loans in 2018 has now become a hundred million ish loans. That a hundred ish number is massive in that ways. And if you look at the main, but it has not increased in value, it has only increased about three x in value. So what it means is that essentially most loans that are going out are small ticket loans, and those loans are being driven by Mbfc.

That is essentially the fintechs, uh, or the new age. Financial institutions that are coming up, uh, which is also causing overall rise in retail loans that are happening in the market Which was 2018. It was around 160 billion Now it is about 450 billion and retail loan has retail percentage of overall credit has become the largest Which was earlier 19 percent in 15 financially 15 now has become 30 ish percent And that's uh, and that's become the biggest way that india is taking loans That is causing a very big problem of NPAs, uh, overdraft, DPDs, and essentially that.

And I would like Sajit to step in and explain what is happening over here and also give a shout out to DPD zero. 

Sajith: Yeah, sure. DPD zero is actually a portfolio company. Uh, we invested in last year. Uh, Anurag spoke about this rise in, uh, personal loans and retail credit. Uh, it's also interesting to look at this as.

An India 2 theme, if rising consumption, uh, the case shaped, uh, kind of recovery curve that we're seeing, the investment into equities was an India 1 story. And the India 2 story is really about increasing credit. And that's another way to look at it. And if you look at the India 2 story and increasing credit, what we've really seen is the rise in personal loans, the rise in small ticket personal loans, which is unsecured credit, right?

There's no collateral against that. And historically, if you've seen the Indian economy is as a very undersized credit market, uh, much more so than, uh, many comparable countries. Um Now, the reason for that has been a lot of the credit has been secured lending against collateral, like home loans, and not everyone can afford a home, right?

Like so or vehicle car loan, so secured credit, unsecured credit, small ticket loans has been a very small part. But what has happened is over the last few years, FinTechs, well funded, uh, able to leverage technology like DPI, like, you know, uh, and, uh, sort of like whether it's UPI for, uh, like, uh, E NAT or UPI, like payments or using E NATCH or account aggregator frameworks have been able to bring in more people into the fold and who are they bringing in?

They're bringing in India to typically first time, uh, what's called new to credit folks, et cetera. And, uh, When those new to credit folks get a loan, they're not used to loans. They're not used to repaying always on time. They have challenges. And that is really what has happened. We've seen some interesting data points in the report, like the number of people who have like five loans or above it's like 10 percent of the borrower base.

And they have like 40 percent of the loans go to them. So are they kind of circling circulating the loan amongst each other? I don't know. Okay. So we're beginning to see all of these trends and really why, if, and if all of those new to credit people, uh, have to kind of pay it back, not all of them are able to pay back on time.

Sometimes they don't have income. Sometimes there are other challenges. That's a little NPS are on the rise. And, uh, so if you actually look at the story of personal credit, it's really been, Grow, growth, growth, particularly one area unsecured small ticket personal loans. And we saw some of the stats saying the kind of jump that we have seen that 31x or something like that.

Um, but all of that means that, uh, NPAs are going up and we are beginning to have a lot of repayment issues. And I think the, and, and, and that really, I'm going to hand it over back to you to what the other implications of that are. Yeah. Yeah. Essentially, 

Anurag: essentially you covered it very well. So essentially what was 13 or 14 percent NPS have become twice of that in small ticket loans.

And that is why RBI is so worried. That is why RBI is like you are hitting the ceiling of number of people that you can lend to in a way that you can get that money back. That's creating a systematic risk in our system. And now, uh, since you've covered this, I would love for Nachumay to step in and talk about India's export.

And why do we think? Uh, that's an important thing to talk about. 

Nachammai: So I think, um, bit of a heavy section that we had with personal credit. So let's, uh, lighten it up a little. Uh, let's talk about India's exports, right? Um, I think there's been this large conversation about India being a service exporter, um, interestingly, but also.

Or at least significantly exporting people compared to services, right? Um, and that's broadly sort of the way we've gone with this section of the report. Um, we looked at India's, the Indian diaspora, right? So migrants from India. Um, and India is actually one of the leading countries with the most number of migrants compared to Um, other economies.

Um, and a lot of this, uh, essentially comes back to India, uh, gives back to India through remittances, um, and very sort of, uh, interesting way that we've sort of broken down these diasporas, right? For example. Realize that, uh, in the U S one in three, um, engineers and more scientists and IT companies are actually Indians.

So that's, that's a great way to think about, um, India's exports. Right. Um, another thing is that, um. The household income of this Indian diaspora in say the U S it's insane compared to India's, um, household per capita in India. It's about, let's say 10, 000. Uh, if you look at 2, 600, uh, per person. Uh, but if you multiply that by four, we're thinking broadly 10, 000, 10, 800 is the Indian household per capita.

That is the Indian diaspora. So the Indian, um, diaspora U. S. household income is actually 150, 000. So more than 10x, right? Um, fascinating stuff. Um, we're also sort of broken down in this section, the remittances and where they're sort of coming from. What are those, uh, top diasporas that are sending remittances back home?

Um, very interesting one, uh, was Canada, actually. Which, um, punches well below its weight in terms of the remittances that are coming back. Um, probably could be an indicator that the entire families are migrating and so on and so forth. Um, another way we've also looked at it is that story of India being a services exporter.

Um, and here we actually compared it to Saudi's oil exports, right? Um, they're close. Very, very close to Saudi's annual, um, oil, um, export. 

Sajith: It's one of those, uh, unfair, but relevant comparisons, I call it. And, uh, I love these, uh, juxtaposing these two very unlikely, but, uh, seemingly kind of conceptually interesting, uh, topics.

So this was one of them. Uh, yeah. Back at you. Yeah. 

Nachammai: Yeah. I think, um, another way there is to think about the Indian diaspora as part of our consuming class. Right. For years, we've been sporting Indian snacks and sweets back to the West for the Indian diaspora there. So I think, uh, today, a lot of Indus Valley players are also doing this.

So that's a great way to think about, uh, the Indian diaspora as an addition to the India one consuming class. Absolutely. Um, and also, I mean, I think this is one of our lighter slides in the report where India is exporting culture, right? You're seeing Indian culture more and more in popular culture today, whether it's Netflix series, whether it's, um, the songs that are going to the Oscars, the products that are going in Oscar hampers, like one on T, for example, um, they're seeing UPI.

Uh, as something that is going to be exported, um, right. So I think these are great, uh, fascinating stories coming out of India being consumed in the global 

Sajith: stage. I think a good way to describe this as, uh, is as India's rising soft power. Right. And as a country gets richer, as we get, uh, this India one gets richer, they start traveling, they start creating culture.

Increasingly, that culture is going to get more and more eyeballs and going to break out of its narrow pockets in the Indian diaspora to the wider mainstream. We saw that with Chinese culture, we saw that it's Korean culture. It is going to happen right with India as well. And, uh, I'm particularly fascinated by the Wikipedia chart, which looked at the most visited pages and quite a few of them are about cricket or about Indian topics.

Increasingly, I think the, the, the story is about. The Indian English speaking, and if we talk about the 120 million, uh, India one, all of them are English comfortable. And, uh, as all of them are English comfortable, uh, they are increasingly expressing themselves on the internet. And, uh, if I say 120 million, almost 80 90 percent will be English fluent.

At 100 million, I think we are bigger than UK, the Indian speaking community. And if we were to be a country in Anglia, okay, or whatever you want to call it, if in Anglia were to be a country, it'd be 100 million. It'd be the second largest English speaking country after USA. Yeah. That's another way to look at it.


Nachammai: And I think this, um, English speaking soft power is really at the center of the three exports we talked about. Yeah. Um, Human capital, the export of services, and the export of culture as well. 

Sajith: Absolutely. Well put. 

Nachammai: Yeah. Um, and since we sort of talked about India slowly thinking about exporting some of its DPI, its digital public infra, I think that should be the next section that we break down.

Sure. Over to you, Sajith. 

Sajith: Of course. Thanks Nachu. So DPI exports to DPI and DPI is essentially digital public infrastructure and refers to all of those protocols that have evolved in India and the products that have served as front ends to those protocol, uh, UPI for instance, okay, Aadhaar, which is a fundamental digital public infra product, uh, um, you know, DigiLocker and so on.

A good way to understand them is by seeing them as. Uh, three, three aspects really, uh, there's an identity layer, which is Aadhaar effectively. Then there is a payments layer, whether it's Aadhaar enabled payment service or UPI. And finally, there's a data exchange layer. Okay. DigiLocker is part of it. And like the account aggregator framework is part of this and all that.

But what we've really seen is that these services have kind of come to cover much of the population. Like Aadhaar covers like 90, 97 percent of the people. Uh, UPI is increasingly used by at least, I think about 300 million people now. Of that. So that has been one, uh, great success story, uh, of the last 15 years, so to say, since AAR began in like 2009 10.

Um, if I were to now look at, uh, the use of UPI, uh, uh, sorry. If I were to look at the use of DPI, uh, that's digital, public infra, and if I have to look at the government usage, it's got directed to a lot of. welfare efforts. Okay. And, uh, uh, DBT or direct benefit transfer in kind as well as in cash has been an incredible success story.

We saw it during COVID, uh, when, for example, uh, when, when the pandemic and DBT really rose. And we've got stats about how dbt is risen in kind as well as cash. Um, a good way to kind of understand India and I always feel a good description of India is as a digital welfare state. Uh, marrying, uh, the, the, the digital public in front, the digital protocols with the welfare mindset of trying to bring up the India three and India two people.

Okay. So, so digital welfare set was, I think, a good way to kind of, uh, understand India and especially the government's efforts. But it's not the government alone, as we saw with um, uh, startups, and that comes out in the next slide, uh, is that startups have been able to leverage DPI as well very effectively.

Uh, and, uh, if I were to kind of, uh, uh, uh, look at some of the examples. We've got Zerodha using, um, uh, Aadhaar and EKYC to kind of drive fast onboarding. We have the story of how Stage used UPI AutoPay to kind of drive higher retention. We've got an example of SnapMint using the account aggregator framework, uh, to.

Uh, reduce, I would say fraud to reduce the cost of onboarding to drive higher profitability. So for lending, it's been an incredible story really. Okay. The account aggregate framework, uh, then mobility, uh, Namayatri. And for those, it's been a godsend, uh, maybe less so in some other, other parts, but, uh, Calcutta too, I think that they're growing very fast.

Um, so, uh, so I would say mobility via ONDC is a very interesting story and we're going to see, uh, with Dara coming to India from Uber and talking about ONDC, I think it might be very interesting to see what happens next there. Are they going to innovate on it, et cetera? On e commerce too, we have kind of some data.

Let's see how it evolves a bit early to say that Uh, uh, you know, so so so those are ways in which the digital public infra has been leveraged by startups Yeah, um, that's it This slide is about, this section is about government and Indus Valley, and DPI is not the only way in which the government has supported Indus Valley.

There are schemes, which some of them involve funding. There are, for example, specific reforms targeted at a sector. Space is one area where they've been very helpful. The grants, there are grants, for instance, the subsidies such as in the EV space. So all of that has gone to kind of support, uh, uh, I would say, uh, startups.

Um, you know, but, uh, with all give it, it's also sometimes take it. And, uh, we also try to capture all of the, uh, kind of, uh, I wouldn't like to use the word hurdles, but sometimes there are hurdles. Sometimes there are direct actions, uh, which. Uh, stop startups from doing a specific act like real money gaming, for instance, the government came down very hard.

Crypto, they came down very hard, effectively, uh, uh, has post a crypto, for example, has decimated the industry in the case of real money gaming has put serious hurdles. Uh, in case of fintech, the government has taken specific targeted actions to end to basically cover what you said, underdog and personal credit.

They are worried about the, Credit, small loan unsecured credit rising. And now you'll say, why is RBI worried about that? RBI is worried because this credit, if it is not paid, will impact an entity and behind that entity are depositors. Yeah. Okay. And RBI is very worried about depositors money not coming back.

So hence, and hence it puts those restrictions. So, so, but really, we've kind of looked at three sectors where, uh, you know, which are, which we call the government ticket sector. And, uh, so effectively that kind of brings us to the end of, uh, the government and Indus Valley, uh, section. So now I'm going to hand it back to Anurag for the next section, which is really.

about Indus Valley. And I think you're going to start with the Indus Valley environment funding, right Anurag? 

Anurag: Yeah. So when we talk about Indus Valley per se, right. So I think the venture ecosystem in India is going through a transition period sort of a way, right. And it is recalibrating well, every market, right, where there's a slide where we have shown all the four top.

Every slide, every country has seen a drawdown. India has seen a bigger drawdown than the rest, where it has become the quarter, essentially one fourth of what it was a couple of years back. And now when we try to take a closer look at it, so we are effectively back in 2017 levels in the amount of money that we are deploying, but with far lesser deals.

We're like on an average, we're doing around thousand deals right now. Earlier, we were doing around 2000 deals there in 2016, 17. So far fewer deals and almost the equal amount of levels. So when we, when we try to see what is the reason, and we'll try to break down the funding into three parts. So there are basically seed then early stage in the growth stage.

And when we look at seed particularly, there are two, three trends that come out, right? Talking purely from a seed lens, seed has slowed down, but it's still very resilient compared to everything else. While there is half, less than half of what is deployed in 21, 22, like 21, 22, uh, there was about 1. 8 billion sort of deployed.

And in 23, it's about 0. 8 billion sort of that has been deployed, but the average seed check seed check is larger. And there are three key things that we observe over here. And, uh, I would love to love for Sajith to jump in and talk about what trends they're seeing when he is looking at deals because we are primarily a seed and early stage fund 

Sajith: per se.

Yeah. When I look at, uh, the seed market, um, I think, uh, what we're really seeing is, uh, I'm for want of a better phrase, flight to quality. Okay. So, uh, in 21, for example, um, Two kids out of, uh, a good engineering college after two years in a fast growing unicorn would get like a 2 million check. But, uh, today I think, uh, with just pre revenue, with just an idea, like, you know, with just a deck.

But today I think that's not going to happen, right? I think everyone is careful now about, uh, and perhaps like an 8 10 year old operator. Who was from a very reputed firm, uh, uh, you know, you know, growth unicorn, et cetera, can probably get a pre revenue check and maybe a second time founder can. And so, so what you're seeing really, there is a whittling down seed numbers.

So you, there's a certain kind of seed check, first time founders, et cetera, has gone out of the No. And what do you really have? What more elite founders? And that is why you're seeing that check go up because for them, the average ticket size hasn't gone down as much. Yeah. 

Anurag: So essentially you're not doing more number of rounds, but the rounds that are happening are bigger because you're betting on second time founders.

Sajith: Yeah, 

Anurag: I would say so. Right. Right. Like when we start to look at growth, we see a further starker drop. While early stage series A and B have dropped about 33 percent of 22 levels, late stage have been even worse, which has dropped two years continuously in a row. Where it was 32 billion in 21, which became 16 in 22.

Now it's about 6 billion. So about one fifth of the size it used to be in 2016. Uh, so essentially what we saw was that there are the main participants or the most amount of money that was being deployed, uh, in the late stage funding has drawn down because of lack of participants or what there are broadly two trends that we see over here that.

People, the companies, the funds are willing to wait, willing to wait for more efficiency, more profitability, all of those things. And founders are also willing to wait if they have cash reserve so that they don't have to do a flat round or a down round, which is why newer, uh, newer, bigger deals are not happening.

Sajith, would you like to add anything on this? You've 

Sajith: covered it well. I don't have very much to say, except that, uh, clarify one part to say that The later you go, the more the investor will look to the public market for queues. Right? Uh, and when you look to the public market for queues, you look at existing public companies and benchmarks.

Uh, so if you are creating a product that competes with, uh, like, you know, uh, uh, listed company, Uh, then your investors who are coming into that will look at that public company, take those benchmarks and apply it back. So in a way, if Zomato gets higher multiples, then, uh, Swiggy's valuations, because it's private will be taken up to reflect that.

Zomato's multiples get compressed. Then an investor coming to Swiggy is going to say, if they are at this stage, why should I give you this? So, so, so, so that is a fundamental challenge. And so what happens is the exit market, your marketing tool, the, the, the, sorry, the exit, uh, uh, and hence the next investor who's, who's closer to the exit sets.

The broad strategy you are willing to follow, uh, because the growth guys need to take it to IPO and the IPO and, and, and, and the public multiple set of benchmark, they come back and demand like, you know, more and hence are more cautious and that ripples down. Yeah. In our case, because you're so far removed from, uh, you know, exit or IPO, we can afford to be a little more forward looking and give maybe a richer multiples, but eventually we'll also have to kind of be careful.


Anurag: Yeah. And this also reflects in the number of Unicorns that have been created, right? Like last year it was only two, but at the same time, the number of IPOs have increased. We have flipped in terms of IPO to Unicorn sort of, sort to say like this last year was around eight. Venture backed unicorn that happened.

And one very interesting part has happened is like the IPOs of 21 like Zomato's and Policy Bazaar which were doing which which got hammered for a while have turned themselves around Like what we have understood is that profitability with growth is what india values Which is what they are getting into and they are they are getting back to a rich multiple, right?

Everybody they have turned around they have Become higher than their IPO price, essentially, which also, uh, which also is a very interesting way of looking at how, uh, there's a public private divergence that happens sometimes, um, but effectively the, that is, that has been the broader story and also a story about VC versus PE, right?

That's a discussion that we always have. Right. Uh, VC versus P and then India versus China. When we look at the whole thing, what is happening? And one thing that has emerged out is that PE has done really well in India. While VCs have not done as well compared to China. The main reasons, if you have to break it down, or if you have to simplify it is basically P's while VCs are still in the process of doing that.

And while in China, the technology is the, the, the, there are every few years, a company that comes and goes. Uh, global where at Alibaba, Temu, Sheen, all of those things that has not essentially happened in India also in some ways. Uh, and the only, or the biggest success story for India has been Flipkart in terms of exit.

Uh, do you have any broad thoughts on this particular part? No, 

Sajith: you broadly well put. Uh, I don't, I want to just double click a little bit into the differences between India and China. I think in China, the private equity sector is far smaller than it should be. And I think that is a reflection of the excitement that there is in the tech VC world.

Hmm. And so, uh, because it's been really faster growing. Relatively exits are easy to come by. Lot more listing. The IPO activity is a lot more. Everybody's gravitated towards there, whereas in India, I think it's somewhat been the other way around, um, not entirely, but somewhat been the other way around where private equity has, uh, done well, they've shown greater consistency of exits.

Yeah. Uh, and like you said, uh, you know, um, Fripkart. Uh, still, uh, gives exits like, you know, even, uh, like, like last year, uh, I think, I think Axel and, uh, Tiger Global made more than a few billion dollars selling their old shares. And, um, so Flipkart is a gift that keeps on giving, but we don't have a very, we need a lot more Flipkart type ones.

And, uh, that has been one of the challenges of the Indian venture market. Um, yeah. And I'm sure here and next year, there'll be a lot more IPOs and some of those questions will stop getting asked. 

Anurag: And I think that's a very interesting segue to when we talk about IPOs, right? IPOs are on a boom sort of a way.

And, uh, like. If you look at purely in the last year, be the, the IPOs billion, which is only lesser or which is lesser than 21, 22. But if you remove, let's say, LICs and all of that, it becomes almost equal. That means IPOs as a way of exiting has become very much possible. And I think that has also, that is also some ways that Indian venture is adjusting to that.

And we are also seeing a lot of liquidity also by IPOs. Like you look at go colors, you look at Zomato, you look at PB FinTech, all of that has created liquidity for investors also in many ways. So, which, which is a very interesting way of saying that we are getting there, but it is, it is just taking us some bit more time in that.

Uh, and then now, if you look at, let's say like just a step look at, let's say what does the Indian public market look like that roughly about 4, 500 companies. But about 3, 500 companies are interestingly less than 

Sajith: 250 million, which, 

Anurag: which does not like, because we always spoke about Reliance or TCS of the world, we never realized that there are so many companies that are so that are less than, let's say, 2000 crores.

Right? And that creates a very interesting thing It's a myth that you need to be very big to actually do that, to do actually, to go public sort of a way and which, which I think Sajith makes, makes a very interesting point that SMEs, uh, SME IPOs is a very interesting way to look at the next growth round, the next way to get funding or the next way to get exits and would love for him to talk about SME IPOs and his view on that.

Sajith: So firstly, thanks to Vikram, uh, Gwane and, uh, da, our colleagues for, uh, putting together that, uh, incredible, yeah, that under referred to 4,500 companies, but, uh, 3,500 of them are, uh, under 250 million in valuation. So, uh, that was an eye-opener. And, uh, that also then when we marry it with SME IPOs, uh, and, uh, there's also, uh, a chart that UNHR dug up.

Which, uh, uh, which you won't find anywhere else, which is on the SME IPO performance, which is the, the main bores, uh, it's impressive. And then, so we ask a provocative question. And as with all of these questions, uh, it is designed to get a reaction is, is our SME IPOs, the new growth round, not for everyone.

Okay. And I would say that certainly not for many of the companies in our portfolio, which are doing really well, but for a certain kind of company, I would say like a company, which is not the most loved. In, uh, the venture world, which is not seem sexy for a comp for a founder who doesn't wanna build the usual way.

Right? I think SME IPOs are a very powerful milestone and something to work towards. Yes, there are many questions about liquidity for that boss. This is how it is, uh, because you know, the market's been on a roll market. Mm-Hmm. like I've heard all of that. But the data that you pulled out is very interesting.

It's been consistently higher for the last five years. So I think the SME IPO is a potential product, not for everyone, but for a certain kind it is. And we've seen with two of our portfolio companies, last year InfoLeon with just 36 crores revenue. And five crores profit listed. Yeah. Okay. On, on, on. And it was a, it was a very hot stock in the SME IPO.

And before that, 66 crores revenue, 10 crores profit listed. Okay. And now they've migrated to the main bourse. So, uh, I'm very about the SME, uh, IPO and the potential of listing on that. It's not for everyone, but for many founders, it's a very relevant outcome. Exit 

Anurag: outcome. Yeah. With that, we broadly cover SME IPOs and with that broadly funding and how Indian venture ecosystem is developing and would love for Nachamai to come in and step in and talk about a few sectors.

Why do we think that those sectors are doing well? 

Nachammai: So we've also looked at, uh, some of the sectors that have done well in the last year, and we've gone into them a little bit deeper. Um, and in previous editions, we've looked at e commerce. Um, we tried to come at it in a completely different angle, which is digital native brands, right?

Um, and digital native brands, and here we're going to call them DNBs, uh, just for ease of, uh, information flow. Yeah. Um, Broadly, we're seeing that DNBs have increased their market share in e commerce sales or online retail sales, right? What was around 25 percent in 2018 is now 40%. So they've significantly increased their share.

We're also seeing online retail increase its share of India's overall retail market. And it's gone from about Two to three percent in FY19 to now six percent. Um, and so Essentially, we also wanted to break down why this has happened, right? Um, and a big, once again, is DPI, right? Um, UPI payments, um, as well as when Jio came into the picture, and everyone's access to the internet really increased.

Um, it helped, uh, digital native brands really tap into a consumer base. Um, that it was harder for them to access. When they were going up against the incumbents, um, and then this world of commerce and consumer enablers grew and brands really started to take off from then and so did the funding market, right?

Um, in fact, it was one of the higher funded, uh, subsectors of the last year, uh, perhaps behind enterprise tech, right? Which is usually the one that does the best in India anyways. Um, and we've seen some, you know, like hallmark stories come out of this, like the Mama Earth IPO, for example, um, the very large Lenskart, uh, round that was raised in the last year, um, by seeing brands go global and really make.

of course, in global markets, um, and really build their brands abroad as well. Um, and on this front, something that's been very interesting that digital native brands have done is actually change the incumbent playbook, right? Um, many incumbents are building their own online channels. They're building their own online brands.

Uh, online digital first brands, and they're also acquiring a lot of these brands to acquire some of that DNA, some of those consumers, those market insights, and so on. And really why they're doing this is also because of the gross margins that are at play in the online world compared to offline, right?

Where you're competing on price. Um, and that sort of changes a little bit, a little bit in online. Right. Um, and we've looked at some of these acquisitions, for example, uh, the Bombay shaving company investment by Colgate Palmolive, and these are not all acquisitions that also strategic investments in some cases.

Um, a big one was, uh, when the Tata group this year, um, acquired Carrot Lane. Right. Um, so some of these stories are also coming out. And contrast to this, we're also seeing a lot of the digital native brands or insurgent brands as the DSG consumer partners termed it, copying or following in the footsteps of their incumbent, um, counterparts, right?

Um, For example, if you look at, uh, the strategy that Mama Earth employed right before IPO, um, they increased their offline sales share. Um, it broadly went from about 19 20 percent in FY21 to 44 percent in FY23, right? Um, Another thing that we're seeing here is that a lot of these brands have changed the way that they're marketing the brand itself and going about the brand building process.

So we've seen from social media influencers, which was a big part of the consumer, uh, build, they've actually gone back to the ways of celebrity ambassadors and endorsements and so on. Also from, um, digital ads to print, to television ads and so on. And of course. As these brands become more and more omni channel and offline is an area they want to play in.

We also sort of explored this a little bit about how, um, the private equity market looks at some of these players at late stage versus how the public market looks at late stage, right? And so they want to increase their offline as they go into these public markets. Um, the enablers have followed suit, right?

They want to build an ecosystem that helps these digital natives become. Omni channel players. Um, and then we're seeing a whole host of new companies come in, which makes our jobs more fun because we have a new class or category to invest in. Um, as we're talking about some of this. Um, online offline sort of interchange that's happening.

Quick commerce is a big part of this story. Um, you're sort of marrying both, both of these worlds in, in some way. Right. Um, and India actually has a higher, um, e commerce, uh, quick commerce penetration compared to say China or Europe, um, with India, it's about 13%. China is 7%. So really we're doing quite well on quick commerce penetration.

And there's three sort of companies that are leading the charge here. I don't even think I need to name them, but, uh, Blinket, Instamart, and Zepto, right? Um, and as some of these players really change the narrative, again, here we're seeing some of the incumbent, both e commerce and retail players, come into building their own quick commerce channels.

Um, And from here, uh, a good way to think of it is that QuickCommerce is like equal playing ground because it's so new, right? Um, that both the incumbents and the digital natives sort of have, um, an opportunity to really face each other in battle, uh, on, on, um, these channels. And here I'm actually going to bring Sajith in a little bit because, um, you've sort of seen.

Um, both the consumer brand emergence as well as you're looking at a lot of these players trying to attack quick commerce, right? When there's already these three horses in the race, how are you sort of looking at the 

Sajith: space? Yeah, quick Commerce is particularly interesting, uh, because there were a lot of skeptics about, uh, quick Commerce, uh, and, uh, some of it was, I felt a, uh, uh, around the product who needs something in 10 minutes.

Right? and, uh, and that sector took up, uh, a fair bit of criticism, uh. But I think what quick commerce has been able to do is really address what we call the top up purchase as opposed to the stock up purchase, which I think, uh, the regular commerce brands, like BB, uh, like big basket address, uh, scheduled slots, which, which, so, so there've been innovations like order it and you'll get it.

Like next day or something then you schedule delivery like milk basket now quick commerce was 10 minutes I think india has been high and i'm not sure you mentioned that Uh that india is higher than china and I see it as leapfrogging like upi, you know, we are So many real time transactions, uh, much more than any other country, including developed country, uh, it's not funny.

Um, similarly, I see, uh, uh, QuickCommerce as a way of leapfrog. That's one thing. Second is, I think, Blinkist's relentless execution, specifically, and it's, it's incredible how they've executed. Not to mention others have it, but, uh, particularly, uh, it's essentially testament to the fact that the, the, the, the basic, Uh, uh, like, like building blocks of, uh, quick commerce, uh, dark store, uh, set and really setting up the dark store carefully, merchandising, deciding how much reordering many of those begin to get now standardized.

So it's very easy to do the plug and play. Okay. And, uh, and, and, and what. We've seen with Zepto with, uh, Instamart and Blinkit specifically is that they've relentlessly executed on that playbook. And, uh, this is one of the reasons why they've been able to grow, grow faster. And, uh, I would say that many of them are seeing that in, in some of the older dark stores and the older neighborhoods that they serve, they've actually become a unit positive, like, you know, they've become cashflow positive event.

So this is actually what I wanted to, uh, address. I feel quick comments will be us. bigger portion and will move beyond grocery. Like we met a consumer brand who said that about 20 percent of their revenues comes from blanket. And, uh, this is a consumer brand, which is into wearables, has nothing to do with grocery.

So, so, so, so it's incredible how, uh, kind of they've expanded beyond just grocery to add on all of the parts. Office stationeries is one interesting category that you pointed out. Blinkit does printing and, you know, very, very interesting. Interesting, uh, product and, uh, use cases that have kind of they've expanded the market.

Yeah. I 

Nachammai: think, uh, on what you said, right. Curation has been a very big game that, um, a lot of the, uh, quick commerce players have played very well. Um, like your festival related categories or your, uh, seasonal categories, electronics, uh, office supplies. Selling, um, galaxy phones, iPhones. Um, and I think, um, that also speaks to how the way we consume has also changed.

Right? Like we want things and we want them now as well across categories. So, um, Tough to segue into the next one because, um, in stark contrast, uh, to digital native brands, another sector that we've looked at, uh, in depth this time is deep tech, um, and within deep tech, uh, specifically space tech, um, because we're seeing an increase in funding there as well, uh, it's become one of the hotter sectors, in fact, um, and, um, 

Anurag: Pixel.

Shout out to Pixel. 

Nachammai: Um, and this also has been backed as we covered in a previous section by a lot of policy and space, space sector reforms that have really opened the sector up for a lot of, uh, uh, transitions and a lot of growth, um, and within space sector, of course, we're seeing, um. Even the startups in space sort of follow that ISRO model of success, which has really helped, right?

And the ISRO model of success essentially is do a lot more with a lot less, right? Small budgets, but very big dreams And that has worked very well for ISRO if we sort of compare some of the budgets between Hallmark space India had versus their exact counterparts in the U. S. For example, the Mangalyaan mission in India, which was about a 75 million budget, is actually much less than the Barbie movies budget, and goes without saying a lot less than the Mars Orbiter mission that NASA had, which was roughly around 600 million, right?

It's also less than what an Airbus or a Boeing costs. Um, and, um, is it was low cost model is also supported by an ecosystem of enablers, um, which are, um, your SMB, um, um, Suppliers, right? For components, for some of the subsystems and so on. Um, something else that is really pioneering today in the global stage, um, is this transfer of technology between two private companies.

Um, and these are some of the startups that we're seeing as well. Um, and. In fact, one such technology, which is now in the process of being transferred out and tenders are out is for the SSLV technology, right? Uh, similar space bus technology was also transferred in this format. Um, and Israel is really pioneering this one of the only countries in the world to actually do this.

So being an enabler to the startups ecosystem has been a big part of what Israel has been doing. 

Sajith: So, FinTech. Now, FinTech, if you add up all of the constituent parts, right, lending, payments, wealth, uh, is actually the chunkiest, uh, sector, okay? Uh, and, uh, it's actually, from my last five years, That's like the inbounds that come to me.

FinTech used to be a very small portion of those inbounds. Today, even though I don't cover FinTech at Blume, it's actually, I think, the biggest, uh, I'd say more than a third of the inbounds cold pipeline I get is FinTech. Talks about the sector, you know, so it's, it's a, it's an interesting proxy for how big the sector is.

So in FinTech, uh, actually if you look at it, uh, uh, sub sector that has done really well. You know, you see how all of these are interlinked, right? You spoke about personal loans and how the rise of that. Not surprisingly, within fintech lending is a single biggest sector, right? Subsector, see how it all connects.

Now, uh, it wasn't so till a few years back, it was payments. Now fintech is, uh, sorry, now lending is, uh, so now within lending, um, I think, um, we've spoke about how fintechs. And NBFCs are responsible for much of the loan origination. Uh, and, uh, that data can only be seen in the slide where we've actually given you four interesting pie charts, which actually look at how FinTech contributes, uh, contributes to, uh, the new credit customer, new to credit customer origination, but a third, 36 percent comes from them.

Then for example, of share of personal loans, Um, by volume is more than three fifths. Uh, but the value is only a 10th. So, so I think the point that we were trying to say is FinTech is expanding access to retail credit, to personal loans, much the same way in which I would say the digital brokers. Like Zerodha, Gro, uh, Dhan, uh, expanded, uh, the, uh, access to broking, uh, from, so these two charts, uh, one is a pie chart, set of pie charts, and one is a bar and line chart, kind of few, how fintechs have expanded access.

Okay. Uh, uh, so if I can look at the next few slides, they're really talking about a particular theme that FinTech is now too important to be left to FinTechs alone, right? And the basic building blocks, tools, APIs, access are all there for a non FinTech, okay, to kind of pick and choose and deploy. So what we're seeing is very interesting.

The payment aggregator license is not for fintechs alone. Increasingly, if you have a very large customer base, a very large payment base, you want to make sure you control that too. So, no wonder that Zomato applied to be a pay license, payment aggregator license. Embedded fintech and really embedded lending is another interesting use case where non fintechs have kind of come in.

And so essentially, if you have a customer base and you sit at A transaction, then one way to kind speed up more number of transactions to give credit really. Right? Mm-Hmm. So very simple. And, uh, we've seen that with a portfolio company of house leverage, how effectively they're becoming a quasi FinTech company because, uh, they do send the, send students abroad and, uh, many of the students, uh, they're sourcing the loan for, uh, you know, like in, like in a, like a credit.

And the likes. Um, So the third one we have seen is, uh, embedded insurance and we have a portfolio company Zopper who've done incredibly well. So, so we're saying like, for example, the likes of, uh, a mobility company, which says, uh, you, you, if you're flying, do you want to take insurance that's powered by someone at the backend.

So. What you're really seeing is very interesting, uh, ways in which non Fintech companies have been able to serve and address Fintech use cases, whether it's lending, whether it's insurance or the likes, right? Now, what's happening on the Fintech side is the Fintech guys, especially on the payment side, they lack a business model because MDR zero, right?

So they're not making money. So no wonder when the ONC opportunity came both PTM, uh, which had PTM Mall, which didn't do so well. They've re rejuvenated the brand and, uh, uh, phone pay, uh, with pin code now has gone into kind of address that. C we all know does cur interest curation of very interesting brands meant for their audience, et cetera.

So thi this was a very interesting set of trends that we noticed. Um, also. From there, we looked at three sectors. We've kind of given you the double clicks on those. We want to kind of look at the final section, which is really what we call playbooks. And it's one of our favorite sections, because what we get to do here is to really compile interesting case studies.

And by innovative, innovative companies, right? And so we've got a few of those. I'll cover, I'll not cover every single one, but I'll kind of highlight and talk about a couple. A little bit about, um, uh, uh, you know, uh, the consumer tech and consumer social consumer tech, uh, uh, uh, kind of, uh, products. And, uh, we've got this two axis, uh, and, and, and, you know, you can create multiple access, but we created these two access to kind of highlight how, uh, differing strategies, uh, are being used, uh, by, uh, uh, this way of consumer social consumer tech companies.

Um, we've also gone deeper into one of them called friend a little bit to kind of show how they've addressed. So Fundamentally saying that the payment unlock thanks to UPI allows you to come up with two broad strategies. Uh, one is microtransactions where you actually allow in app purchases, much similar to the gaming world.

Okay. And the second is to have subscriptions via UPI auto pay, okay, which, which creates very high retention. Neither strategy is, uh, bad, uh, you know, all of them work, but they work. So for that to work, you have to create your product around it. With PocketFM, what they've been able to do very cleverly is because it's microtransaction linked and you would pay up each time, you could use the coins each time, they create this cliffhangers at the end of their stories, right?

So but if you, if you don't, if you don't have that, like CocoFM, they don't necessarily do that. As of now, because they use more subscriptions, right? So it's very interesting how all of these elements dovetail into each other. So that's a little bit about, uh, consumer tech. Uh, last few slides, uh, really take a look at, uh, what we call merchant media.

And that's been a fascinating segment of advertising the media world, which is basically that much of the profits of, uh, I would say, uh, the e commerce Increasingly, uh, also your commerce companies as well as vertical commerce companies are being driven by advertising much of the profits, not revenues.

Revenue wise, they are basically close to about 10 percent of revenues. This is hidden away within and it's not easily apparent. Uh, this data, uh is not easy to come by because uh, They don't necessarily report it. It gets structured into the thing because a lot of this revenue is inbuilt into the way they It's like an arrangement with brands.

It's a marketplace brand strike, an arrangement with participating brands. But it's been growing and it's all profitable. 80 90 percent margins, right? So that's been like a bright spot. And today, one of the interesting things was, I came from print, I worked in the Times of India group for a long time. And I found it very interesting.

Particularly interesting, uh, that, uh, today merchant media, as we call it, is as big as print and, uh, much the same business model. Print gives us newspapers virtually free and monetizes through ads and merchant media, all of those groceries, not free, of course you pay for it, but they don't make much money on it.

But there is this being to make money on all of this. So that was particularly interesting for me as well. And finally, um, Zetwork, uh, and, uh, and, and, and sort of, we wanted a B2B example. And it's been a very interesting, uh, success story. And why Zetwork is particularly fascinating is because it's unlocked.

playbook of aggregating fragmented suppliers and selling it to organized, consolidated brands, which we think is a superior strategy in India than the other way around, where Udaan, for instance, while I mean, they've had challenges with their model, because a particularly challenging model where you sell into the unorganized sector, because you need a large army of people to kind of address that for the feet on street.

And you're buying from very organized, consolidated brands. Who, uh, or already have the solutions to reach out to these people. So, so India, we feel like it, the Z Work model is arguably slightly better, and that's what, uh, we wanted to highlight here. It's also particularly interesting how Z Work, the others too, kind of parallelize manufacturing by creating this cloud factory, which given India's desire to kind of, uh, grow in manufacturing.

Could be another leaf frog model, like, you know, where we do not necessarily have to set up large factory, but aggregate them very smartly. So that really is, uh, yeah, I think the last slide, right? And, uh, yeah, so, uh, So I want to kind of close now by kind of asking you guys and I want to put you on the spot by saying like, uh, was there any favorite section, favorite moment, uh, or least favorite, uh, it's your time.

So Anurag you go first and then Nachu. Yeah. 

Anurag: So this is coming as a surprise. I didn't know that, uh, this would come up, but I think, uh, Two or three things that I really liked or came out to me was the VC versus P parallel that we look at it. It was a different way of looking at it because it made me question a lot of things that how should we operate?

Uh, then there's quick commerce essentially is something that is surprising. That's like something that I was on the, on the naysayer sides. And I realized that. Okay. You can drive efficiency by numbers. And I guess third would be how, uh, DPIs have actually DPIs having second order effects, like first order was Adhar, second order, uh, was Adhar and UPI became the first order, account aggregators, ONDC becomes the second order, that kind of stack is being created, which I felt was.

Something that we always know about. We talk about, we use it, but we don't realize what are the implications of that. So I think those are three, but I can keep rambling 

Sajith: for it. Yeah. 

Nachammai: Um, I think consumption is always a highlight of this report, right? Because, um, just as Folks who work in venture capital, right?

Our understanding of India evolves every time we take a look, uh, at the consumption section of this report. Um, this year I really enjoyed, um, the IPO section and contrasting that with, um, that being maybe Indus valleys. Way to exits, way out, uh, perhaps, right? Um, I think that's been a great section as well.

Um, personally, I mean, I really enjoyed, uh, some of the sections that, uh, I got to dive deeper into, like deep tech, uh, uh, digital native brands. Um, yeah, I think, uh, it's, it's, it's overall just been a really great way for us to deepen our understanding of India. The many 

Sajith: India's. Yeah, many India's. Now, thank you for that.

And for me, I think, uh, the DPI slash Gurnwind plus Indus Valley section was particularly interesting, but also got to talk to a lot of people in ONTC and, uh, Sehmati and kind of learn from them. And it's particularly interesting. Uh, can't wait for the next few years and how they unfold. Uh, SME IPO was a particularly interesting one, made me think a lot.

And as always, I think the playbook section, because you talked You're specifically writing about interesting success stories always is an exciting one. But yeah, uh, so it's an, it's an experiment of, you know, three of us coming together. We worked on the report over the last few months of putting together, uh, all of this data points.

So we thought we'd come in and, uh, kind of create this companion video guide, uh, audio guide for those of you who want to kind of listen in on video off mode, but I think if you watch it, you'll also see all the slides, etc. Um, uh, and the idea was to kind of be a companion guide to the Indus Valley Annual Report.

Uh, and, uh, kind of, uh, go along this. I hope you like this. I hope you guys read the Indus Valley report. Uh, if you've read it, do tweet it, spread the love on social media. And, uh, we hope to keep coming year after year, uh, with iterations of this. Oh, thank you. Thank you 

Anurag: guys. Thank you for watching.