Daybreak - Daybreak 2024 Wrap Part 2: Writers' picks

Episode Date: December 19, 2024

This isn't your usual Daybreak Friday episode. Considering it's the end of the year, we thought we’d ask the reporters in our newsroom to talk to us about the stories they liked best. This week, we have DVLS Pranathi and Shristi Achar on the show.They share two of their favourite stories — First, Pranathi tells us about an unconventional new homegrown footwear company started by three former Puma executives. Next, Shristi speaks to us about why Karnataka’s EV battery making ambitions are stuck in low gear. Shristhi's recommendation: How the stock market is fuelling India’s grandest-ever wedding season  Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.Listen to the latest episode of Two by Two here 

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission. We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture,

how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert as soon as we release our first episode,

please follow Intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. So and welcome to another special episode of Daybreak. I'm your host Rahil. And since it's the end of the year, my co-host, Nikda and I wanted to look back

at some of our best stories of 2024. But to make things. interesting, it's not going to be us doing the choosing. We will be joined by some of our lovely colleagues here at the Ken, the reporters who actually told these stories. Now, a couple weeks ago, we brought two Ken reporters on the show to talk about their favourite stories from 2024, the stories they best enjoyed reporting on.

And this week, we have two more stories for you. The first is by DVLS-Pranati about an unconventional new homegrown footwear company started by three former Puma executives. The second is by our colleague Shristi Achar. Sinkna spoke to her about why Karnatica's EV battery-making ambitions are currently stuck in low gear. Last year, three top executives from the German sportswear brand Puma decided to quit and launch their own venture. A footwear company called Agilitas Sports. Now, within a year, their new company was able to rack up more than 700 crore rupees in revenue.

Perhaps Agilitas' rapid success had to do with the three-furtes. founders and their expertise in this particular space. After all, one of them, Abishik Ganguly, had a very successful 18-year stint at Puma as its India head. In fact, under his leadership, the company's revenue rose from 20 crore rupees to 3,900 crore rupees. So this is a guy who understands the ins and outs of the business. But the funny thing is, this new venture is nothing like Poma or any other footwear. brand for that matter.

So far, Abysheek and his co-founders Atul Bajajaj and Amit Prabhu have steered further and further away from the conventional sportswear playbook. It all started with the trio's most audacious bet by far, which was its acquisition of Gurugram-based Mochiko shoes last September. Now that was a business decision that caught most people completely off guard, including the Ken reporter DVLS Pranati. Mochico manufactures for like the most, the biggest companies in India. That's like Puma, Nike, Adidas, there's crocs.

They manufacture for all of these companies. And then there's this startup that has basically a company that has just acquired the entire, you know, manufacturing unit of Mochiko. This was also Pranati's debut story here at the Ken. She's part of our journalism leadership program. So this one's extra special. In the news, I just came across people talking about how AgilTas had just gotten funding. a couple of months ago before that. So I started reading up more about it

only to realize that the founders were ex-Puma management. So clearly, like, very actually out of curiosity, I just reached out to them and, like, you know, wanted to know more about it. And I had also read that they had acquired Munchiko, like, completely. And that's where, like, it really interested, like, sparked my curiosity even more, to be very honest, that why would a startup, you know, start with like buying or like acquiring a huge company? Like that is something that we have not seen before. So a couple months ago, Pranati met with Abyshek to understand the Mucico acquisition

and what his vision for Agilitas really is. Basically, the company's motto is very simple that, you know, they want to make for India in India. Is what like, you know, the founder told me when I spoke to him. their main goal is to basically make footwear in general for any kind of population that's there in India starting from kids to like you know older generation and there are like

this is something that was very new that even I found out while doing the story that like you know in India there are like three four different kinds of feet and like you know for each kind of feet like there's a different shape of the soul that needs to be made in order to build comfort and also like you know in order to like

improve the shelf life or whatever you call off the shoe for a longer time because if you wear a shoe that's not in the shape of your foot it'll like you know also because of wear and hair it gets like spoiled faster

So shoes tailor made for Indian specifically? Yes specifically for Indian feet You see most people who venture into the footwear space here in India go down the tried and tested route that usually means starting their own

footwear brand where they design their own shoes and then sell them under their own label But Agilitas has far bigger plans. Like Brannati mentioned, Mochiko is one of the country's biggest manufacturers. And by acquiring the company, Agilitas made it clear that it didn't just want to be another footwear brand. It wanted to be the company making the shoes for other brands. It did sound a little too good to be true in the beginning because like, you know, in general, like most of the shoes that are, most of the companies that are there that are sold in India, like, you know, whether it's Puma or.

Nike or Aridas, all of their headquarters are either in like, you know, Germany or in the US. So most of the times the designs come from there. And they just replicate the designs as it is over here. But then here's this person who's saying that, you know, like, yeah, we will get, we are not going to like, you know, sell the same, we'll sell the same company, but we're only going to get licensed for it. Let's talk about how your favorite pair of sneakers were made. Turns out it's a very long-drawn, complicated process for the most.

part. Like Pranati said, most European and American brands like Puma, Nike or Adidas, outsource the whole process to countries like India, Bangladesh or China. Homegrown brands tend to outsource manufacturing as well. And that's because most shoes are made up of dozens of different little parts, all of which finally need to be sewn together. And fun fact, footwear brands generally have to source all those different parts from different places across the country. basically in a shoe the most difficult part to manufacture is the soul like it takes a lot of effort because there are there's a lot of equipment that is required to make the soul like you know you need to have the mould and then you need to have like you know the aluminium presser and things like that for which the soul like because of which the soul is made in the first place so that is the most difficult part of it and in no other manufacturing or in no other like shoe company in India

do they have like only one manufacturer who does everything. Like, you know, there are almost 38 components in only the top part of the shoe where both the flaps are there and then you see the metal rings through which, you know, you put the lace and everything. So there are like 38 components just in the upper part of the shoe leaving the soul. So it ends up taking multiple factories to produce one shoe. And that's where Agilitas and Mochi-co in particular come in. You see, this is a company.

that wants to build a whole ecosystem that takes care of every single step of making a pair of shoes, from product design and manufacturing to distribution and brand building. So it wants to bring the whole operation in-house. It's never been done before. Most brands, especially global giants like Nike or Adidas, don't even try it. And for good reason, it is a logistical nightmare. So why does Agilitas want to go down this route? So what's in it for them, it's very simple.

While they have, they very smartly did the acquisition of this entire manufacturing unit in India because they are a B2B company and they're a B2B company that's going to get margins as soon as they started. Like they're starting their business. The manufacturer's margin is what makes it all worth it. Instead of a slice of the pie, Agilitas will get to enjoy the whole pie. Having said that, Abhishek does recognise just how hard this is, especially because you have to nail everything from technical products to brand building to distribution. But that's exactly why Agilitas didn't start from scratch.

It hit the ground running by acquiring the largest sportswear maker in the country. Look at it this way. Soon after acquiring Mochiko, Agilitas also got an exclusive license to bring the Italian brand Lotto to India. They haven't even started manufacturing and designing for Lotto yet, and they already have an over 700 crore rupee business. Largely thanks to the other big brand signed with Mochiko. Basically, there is a lot of money to be made here. Right, Pranity, so who is their biggest competition in this space?

Because it's obviously not new brands, right? Like sole threads or comment. It's also not Puma or Nike. So who are they actually competing with? They do not have any competition as of now. Because that's what, like, even when I had asked the founder saying that, you know, who do you think is like a competition to you? Obviously, there are some brands like, you know, abroad, like in China and like in companies like Germany,

that might be some kind of a competition to them or might be doing something similar to them. But at least in India, this company is just trying to be one of its kind. The other thing that sets them apart is their process. You see, trends come and go, especially now in the age of fast fashion. And that could potentially mean a lot of dead stock every time something goes out of style. But Agilitas has figured out a way to keep up. Now, this unconventional strategy has really worked in Agilitas's favour. It's already been able to pull in 530 crore in funding across two rounds.

400 crore came from Convert Finance LLP, which now owns about 40 to 50% of the company, and the remaining 100 crore came from Nexus Venture Partners. So so far, things are looking very good for the company. Abhishek told Pranati that next year, they will announce the name of another big shoe brand that they've managed to secure a license for. But he also said that he won't be launching his own brand anytime soon. Before that, they have another big plan on the cards.

They do not want to have like a single brand store. Like right now, if we walk into a... a mall. Like, you know, if you go into Phoenix, you see, like, a single store for Puma, a single store for Adidas, then there's like one for Reebok. And like, you know, it's just all of these are like single store brands. But they are trying to build a multi-brand store. Like, all of their offline stores are also going to be.

Like, right now they're going to start off with having like, you know, one store for loto or whatever because that's the only company that they're manufacturing for. But over the next. few years they are believing or they're definitely trying to like, you know, make a multi-brand shoe store. If data is anything to go by, this is exactly the right time to take some very ambitious strides in this space. A report by Goldman Sachs earlier this year found that sports and at leisure are the biggest

growth drivers in the Indian footwear market. That's largely thanks to the COVID-induced fitness boom and the rise of casual clothing in workplaces. But for now, team Agilitas is taking things slow. They don't want to rush into anything. In fact, Abhishek says that he plans to onboard his third category brand only by 2026. But the thing is, to score a Puma-sized win, the company will now have to navigate a market that is flooded with choices.

Next up, Snigda speaks to our colleague, Srishti Achar, about why Karnatica's EV battery hopes are draining fast. Stay tuned. Okay, let me start by asking you, Shrhti, what is it that fascinates you about lithium iron batteries? Pretty dry to like, that's for sure. That was my colleague, the Ken reporter, Shrhty Acher, telling me about, well, her passion for lithium iron batteries. Okay, jokes aside, Shrhty covers the tech and manufacturing sector, which includes even, or electric vehicles and their components.

Like if you talk about, let's say, the lithium ion cells and this whole source of energy and the lithium and battery, that is very core component of EVs. Now, this is essentially that makes up 50% of the cost of making an EV. The battery and the lithium ion cells used in the battery, this is half of it what an EVE is made up of. So that definitely becomes important that we need to have that kind of infrastructure. over here before we move on to having just EVs. Because in the entire scenario, it's also a thing that we have really high import bills. And a lot of it is these kinds of core components or materials that we have to keep getting

from outside because we don't make them here. Talking about components, actually, Shrishy's very first report for the Ken was about Bangalore's dreams of becoming the cradle of EV batteries in India. Now, most of you are aware that the EV or electronic vehicle sector has been the Indian government's favorite child for a while now. The government wants to push its demand by making it affordable and accessible. But despite all the subsidies and support from the government, EV adoption in India has been quite sluggish. And a huge reason for this is the lack of infrastructure. Take batteries, for example.

As of now, like Shrishri's sense, said, we are almost entirely dependent on imports for it. That too mainly from China, which is the largest manufacturer of lithium-ion batteries in the world. In fact, China has ramped up its production so much that just a few days ago, lithium lithium-bion battery prices saw their biggest fall since 2017. But that's another story. The fact of the matter is that here in India, the demand for EV batteries is only going to go up. It is expected to increase by almost 10 folds by 2030.

I think in about four, few years or so, like by I think closer to 2030, the demand for lithium batteries is going to go past 100 gigawatts. And right now, I mean, in 2023, it was just four gigawatts, the demand that we had. So the jump is massive. And we produce nothing. Right now. The biggest factory in this thing that is being constructed is the one that Excite is trying to do. Right. Like that whole, it was the talk of the town, right? Like 6,000 crores and somewhere near Bangal.

And the capacity of that is also still just about 1.5 to 2 gigawatts even then. So the demand that we have and the supply side scenario, there is a huge disparity between the two. So it is the talk of the town. what excite was doing. It's also obviously when you start, you start somewhere and you start a bit slow. But yeah, there's a lot of catching up that is left to be done. Now obviously, this needed to change. So among the scores of original equipment manufacturers that India is trying to lure in

like Apple's manufacturer Foxconn, there are also EV battery makers. In fact, states, especially in the south of India, are competing with each other to back these companies. Like Exide, for example, which has already set up its plant here in Karnataka and wants to start production by March next year. Shrishdi actually visited the plant. We'll get to that in a bit. But before that, I began by asking how exactly these new EV battery manufacturing setups are managing for now. So sourcing these raw materials comes from outside, the technical know-how comes from outside, the partnerships that you have, from outside.

For example, Exide is doing this in partnership with a Chinese company called S-Wold. So that is how they are getting their technical know-how.

Amara Raja has partnered with a company called Goshan. So they are doing... Another Chinese company? Yes, another Chinese company. So this is how it goes about.

I think Log9 is one of those smaller startup companies that exist. I'm not aware if they have a Chinese partnership. I don't think they do. But they do

have like multiple partnerships with different sort of faces that they are going towards. So they don't just have this lithium-mine producing thing. They're also into e-b asset financing. Oh, okay. That's a whole different. No, it's like they're trying to be the service guys as well because they can't just be a manufacturer. It's a very minuscule market.

So you can't just sustain yourself as a company. You have to go ahead and make money somehow. You have to diversify. Yeah. So, Shishi, we know that, you know, there's like this. competition going on, you know, between these states, especially in the south, right, when it comes to setting up all these different types of manufacturing plants. Tell us about how Bangalore came into the picture, like how Bangalore is ideal.

Why is Bangal ideal for producing manufacturing lithium ion batteries? Two things. One is definitely the talent density that exists over here and that's definitely a pull factor. It's not just that you need IT guys to run this. You need people with material sciences and chemical engineering backgrounds. Stuff like the talent that exists over here. So that is definitely a pull factor. It's one of those.

But the other thing is very cliche to what Bangalore is known for, and that's its weather. Ah, okay. So really cliche. You need cool temperatures? Yeah, you need cool temperature of two. store the, or rather preserve the calendar life of a battery. It needs to be transported to play.

Obviously, when you are moving it from one place to the other and stuff and you're getting your materials from elsewhere, you're producing it someplace and then you're shipping it out to other places, you need a place that is not going to make that process harder. And Bangalore becomes a really easy choice for that. So, and it's also a cost advantage, right? See, when you have to cool things down, you have to invest in energy. energy for that as well. So when you don't need to do that,

Bangor becomes a very ideal choice in that. And it's beneficial to the calendar life, that is the amount of life that a battery can hold. It depletes over time. It's built into the very nature of what a battery exists, that it has a sort of a curve. It's called a knee curve. So the usage of it is fine.

It keeps going fine. And there will be like at some point where the battery just stops, you know, having as much as life. as you've had it before. Even our phone batteries work like that, right? Yes. So that same thing applies to your lithium-ine batteries for EVs as well. They all function the same way.

So at some point, their functionality of it starts tapering out. It comes down. So if you wanted that to last longer, you have to preserve it and not heat it as much and stuff. So Bangalore becomes a very ideal choice for doing that. And when you put all of this together and the fact that you have supportive policies, it just, I mean, why wouldn't companies come here, right? Okay. So, I mean, you know, let's try and compare, you know, the subsidies that other state governments,

especially in the South, offer, versus, you know, what a Karnataka is offering, especially for these lithium and manufacturers, right? Can we talk about that a little bit? So there are not specific policies for batteries that exist everywhere or not even in Karnataka. perhaps. But what is actually so there is a central PLI scheme for advanced chemistry cells. So this is the PLI scheme that exists for your lithium

cell manufacturing facilities and such. But what Karnatica is doing is they're offering on top of whatever these benefits that companies can receive under the PLI. Karnataka government is also giving another 20% upfront subsidy on land and machine capitals sort of thing. So which is a huge you know, benefit at that point.

And then, yeah, when you get, when you're promised facilities like water and electricity collection along with it, it becomes a no-brainer of a choice. Makes sense. And every state is picking their, you know, having their pick-off sectors that they want to pull in. So it becomes a natural choice, I guess, for Kanataka to pull in the batteries, companies on this side. Makes sense. Okay, okay. So, okay, let's talk about, you know, excite, right?

It was the talk of the town. I think the news came out sometime in August that it's going to set up a plant somewhere near Bangalore and 6,000 crores worth of investments and the government, of course, like you said, offered some really good incentive, sorry. What is going on with that? Like, you actually, why don't you start with your visit

to the excite plant? That was very interesting. It started actually with me bribing my friend To drive me there with food Is it far from the city? Very far so it's in a place called Devan Haldi Which is like some 15, 20 kilometres beyond the Bangalore airport Which is it's not Bangal at all anymore

So I feel like I might have crossed it in During a bus journey somewhere You probably might have Yeah it's not very far from the airport From there it's about like a 15 kilometre drive Okay, got it. So there is a huge investment region over there that Kanata government has set up IT IR.

So it's the IT investment region over there. So there's a bunch of other factories that are in the middle of construction and stuff. So I went there because the Foxcon factory is there. So I wanted to go see that. Did you? Well, not the inside. From the outside, I got to see something. You're not allowed to go in?

No, no, no. not allowed at all. They'll be like a whole security guard and everything. When I started chatting up the security guys also, they said they signed NDAs and they can't really say anything. Wow. Yeah. I'm not talking about the security guy over there,

but someone who was managing the ops of this. Understood. So I was like, oh, okay. That is straight. It's a tight ship. Yeah, it's a really tight ship. It's not like I can. So it's not even like I can.

Yeah, I can't do that. There is no amount. of charm that's going to work. So I went to go see that and that didn't work out. So I couldn't get in. I barely had a few chats outside and it was so sunny and it was almost like 3pm and I was done. So I was like, okay, fine, I'll go do something else that I wanted to visit.

And now that I had driven there, I'd seen that the excite plant was some 20 kilometers on the other side of this town. But it was still dry with it. It was like still like, see, it's out. outside of Bangalore, so you don't have traffic. So those 20 kilometres can be done in like a couple minutes. Yeah. So we ended up driving.

Which is like, you know, unimaginable. Absolutely. Here, two kilometers is two hours. So we ended up driving there. Okay, there also like, no one let us inside the factory. There was a factory huge plot where a lot of construction and a lot was going on. Give me a visual. Like, what was it looking at?

From the gate, if I. see. It was a, like, in the middle it was like a sort of a ban in land with like a lot of people in it, but I could see like a factory and so like almost a cubicle shaping, you know, brought up. So a lot of tankers coming in, going out, some sort of machinery. It looked like someone oil mining flam thing would look like. That's just in my limited view of things. So I couldn't get much of a view about this at all.

Like I saw one excites banner and like half-constructed buildings and all of it. Looked very happening. Okay. I'll tell you that. That much I could see. There was very happening. Definitely things were being made. That much I could see that.

So, Shrishti managed to find somebody who was actually finally ready to talk. But it was very difficult, as you can imagine. Just like when she went to Foxcon. To be very honest, I wasn't expect. to learn much from this interaction. I just wanted to, you know, sort of show my face. And I just wanted to get some bare minimum of an idea of when at least this project will be taking off or something like that.

So I went for that. But in the course of the conversation, I mean, the guy turned out to be someone from closer to my hometown as well. Oh, okay. So I brought out all my language chops that I could to try and ask as much as I can over there. Of course. A good reporter would do that, of course.

So I started asking about when the project would be done and stuff like that. And then I happened to notice a couple of tankers coming in and out of that place as well. So I just casually asked, like, what exactly are these for? Is this for the drinking water sort of a thing? Because that far outside of the city, I assume drinking water would be the problem. And is that how you're getting the water supply and what? because this is a large workforce to maintain as well. That's when the person told me that, no, it's for the construction site.

What? Yeah. Wait. So, but the government said, right? Like, earlier when we were talking about subsidies and all these things that the government would help to enable manufacturing. Yeah. So on paper, the connections exist. electricity and the water both.

But I'm not quite sure. I don't have the minute details on what happened to the water part of it. So the person just told me that we just don't get it. We don't get the water. So they have to do something. So they got the tankers in because they cannot halt their operations just because they're not getting the facilities. And they have shareholder sitting on their head.

And electricity? And electricity, the connection has been given and everything. There was also some, like maybe like a year ago or two year ago, some other government order that was given a passed out, which said that the extension of electricity and the water thing that excites plant required was provided. But again, so this whole investment region is also being developed in phases. So the electricity connection has been developed only till phase one

and it's not been extended till phase two. And these guys were, their plot was situated in phase. too. So it hadn't come there yet. So on paper, these exist, but on ground they don't. This is insane. Like, how can they set up such a huge plant without an existing solid supply of electricity and water? Exactly. So they have their own generators to do this and then they bring in their own tankers to do this. So then that puts the whole green thing under question, right? It does, yes. It puts the green effort in question. And it's also, it. It's also, it's a whole green thing. it sort of throws light on the amount of red tape and on the amount of,

more than red tape, just the sheer effort it, you know, is required to set up these mammoth sort of operations in place. Which also explains why the progress that we are making in the industry is so slow. Because there are very on-ground real issues that people deal with. It's not just about the fact that we're not receiving enough funds or we don't have the technical know-how or something.

Those can be brought in. but there are very tangible physical, everyday logistical problems that these factories and businesses have to go through. Can you give us more examples of these everyday issues that pop up? I mean, so this plant and, sorry, this electricity and water thing was one.

There was another thing that was interesting that I found out was from another battery company that also has an investment announcement like this. And sure. So when I spoke with them, they gave me another side of this. So they're also setting up

plan in Karnataka? Yeah, yeah. Can you give us a sense of the scale? Like how much money is going in? That was some thousand-odd-crow investment that they had announced. So more than... Okay, thousand-odd-crowers.

Okay, okay. So that was the size of investment that they were planning, that they are planning for. So they gave me another face of this is that if you talk about the bureaucratic side of issues. For example, now this is a industry that is meant to be on the energy efficiency side of things. It's a green initiative.

Yeah. But then you're building a factory and you're building a very gritty, you know, sort of manufacturing industrial factory. And in the terms of, in the kinds of licenses that they are required to obtain to establish something like this,

it falls under red category. Which means that they are not... Environmentally... Yeah. It's potentially sort of polluting or it is potentially, you know, something that's industrial and that there is going to be,

waste coming out of it and stuff. So for establishments of factories like this, they are categorized under a red category apparently. That's so ironical. Exactly. So to go green,

you have to go red. That's insane. Yeah. So these are like very small, small things, you know, that keep happening. And another thing that had been happening was that you needed a lot of technical know-how

and a lot of sort of partnerships coming in from China, which becomes a geopolitical issue then. There was a lot of visa issues that were happening for getting people from China over here. And they weren't being cleared as fast enough for Chinese officials from these companies. Although now that's been, so there's been some progress made in that way.

They're trying to fast track it and stuff. But that is still a problem. Like for one or two, people to come over, you have to haggle for a five to six odd months for them to get their visas and this and that, which is a long decision period for someone who's trying to get, you know, set up a factory as soon as possible. Yeah. They wanted to start manufacturing by 2025 March, right?

Is that going to happen then? I'm not quite sure. I think still, the last time I spoke with them, yeah, it was still on track. Yeah, yeah, yeah, that is still on track. Okay. So, I mean, they're all trying to do that. So basically, like, you know, so many. ministries, so many departments have to all come together to actually get this going.

And that is where... So would you say this is a story about red tapism? I wouldn't quite say that per se. There is definitely a factor of red tapism. Obviously, there is involved. But it's also more about, you know, just the sheer logistical efforts that is required and just how much... I think most people didn't see it come.

just how much logistical efficiency is required and they're falling short. Right. So it's more about that. And red tape has been there always. Yeah. We know our way around it. Okay. So Shusti, let's look.

So now we were talking about behind the scenes, right, so far. Let's talk about the other side. Like, let's talk about the market. You did mention that, you know, earlier when we started talking about the demand for lithium my end batteries, it's only going up despite the fact that we're, the adapt, the adoption of EVs is like kind of slow. But the demand is definitely going up and we're mostly dependent on imports, right? As of now.

So give us a sense of the market. Right. So that is actually the bigger picture of sorts. And when I was talking about all of these logistical issues that people have to face and everything. So this is one end of the problem. where they have, where they have to set up the factory and they have to go through so much to set up these factories. But then they are also entering the market at a very precarious time.

In a sense that China, who we majorly import ourselves and batteries from, now they are the market leader like I mentioned earlier. Part of being that market leader is also that in the last year, year and a half or so, there has been. I mean, their production has been ramped up so much that the prices of these cells have dropped dramatically. What has happened is... Too much supply? Sorry? Too much supply.

They have been able to produce well and they are able to achieve that economies of scale what people talk about. To the point that just about a year ago, if the price for every kilowatt hour of cells that's produced was some like 130 or 140 $50, now it's dramatically dropped down to some $50.

That's more than like a 50% drop in prices. And what happens is when you as a market, when you talk about India as an entrant in this industry, you're already dealing with having to produce these cells in a, you know, sort of difficult situation. And then you have to... Sacking up infrastructure first. Exactly. That is one cost that's already there. And then you are getting all your raw materials also from outside,

which is another cost, you know, addition to your production process. And then you have to get it out in a market in a non-competitive price. That's where it's become a problem. About a year and a half ago, when the price was still around like $130 or $140, back then it felt that we were entering a competitive market. India did feel that because that was still at the price where all of these people who made their investments, they were able to, you know, sort of price it at. But with this extremely dramatic drop in price, people don't have the capacity to compete at that price level anymore.

Which is another major factor why you see all of these projects being, you know, being stuck in a sort of stage of stake of limbo of sorts. So now with Excite, they're taking their time to set up these factories, see they are not getting enough plant and machinery sorry water and electricity sort of issue then there are other things like

for example IBC International Battery Company that's another company that they had intended to invest some billion dollars to set up a factory that's like some 8,000 crores or something

they have slashed it to some 300 to 400 to 400 crores now they can't afford to make that kind of investments anymore because they know they're entering the market in a very precarious time. Damn, so it's looking quite grim as of now, right?

Yeah. Like you said earlier, it's a lose-lose situation. Yeah, it's like a lose-lose situation, but you have to take it, you know, in consideration of the fact that we're just starting out as well. Correct. So while all these problems are at the forefront and people are, you know, aware of it,

people are aware of it in the sense that they're trying to take steps to move ahead as well. But the whole Chinese visa thing, government did step in and try and fast-track the process. So that's one end of it. There are steps being taken to ensure that these processes are taken ahead as well. So from the centre's side, there are consultations that keep happening

and the funds that do keep dispersed or not dispersed. People are in the loop about this. And companies themselves also are sort of trying to stay afloat. like log 9, for example, they know what side of the situation they are in. So they have this whole other arm where they diversify it to start an EV asset financing side of it. So that they can try and deal with other parts of the industry.

And the overarching generalist, people know the amount of grit and, you know, sort of determination you require to stay afloat and actually, you know, send it to fruition. So it's a slow start, definitely. but it should be, you know, viable and get solved soon as well. And when we are constantly trying to do a catch-up sort of effort, at some point we will end up catching up.

All right. Lovely talking to you. Thank you so much, Rishti, for joining us. Most welcome, Snigda. Okay, and before we wrap up, do you have any recommendations for our listeners? You know, it's the end of the year, any favorite stories? from the kin hmm oh I definitely want people

to read Ronuk's wedding story oh that's a great one I've heard people talking about it a lot so everyone has taken note of the fact that there's too many weddings they've gone to this year so at that point I find it very easy to segue it and like maybe you should read this story

he explains why it happens maybe you should get him on the podcast next yes please get him to talk about the wedding story all right thank you so much thank you as well Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings.

A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by Rahil Filippos and I, Sinkda Sharma, and it was edited by Rajiv Sien. Thank you.