The Signal - RBI kneecaps Paytm
RBI kneecaps PaytmAlso in today’s edition: Disney India has a new owner; A Ram-Sita budget; BRICS gets new inductees; No smoke without Modi family fire
Good morning! Not all change is bad. Just ask the carpet weavers of Kashmir. The ancient art of handwoven carpets is getting a helping hand (no pun intended) from AI. According to the BBC, makers are incorporating an AI software that is trained on talim, the code used to design carpets and guide weavers. The software notifies weavers of potential errors in design beforehand, thus saving them time and money. Now that’s a disruption we can all get behind. Soumya Gupta and Adarsh Singh also contributed to today’s edition. The Market Signal Stocks & Economy: Indian investors and share traders treated the interim budget for what it was—a vote-on-account. The two benchmark indices closed lower, mostly because the event was already priced in on Wednesday. Bank stocks got a boost after the government reduced the size of its borrowing programme, vacating space for them to lend to others. Now all eyes will be on the Reserve Bank of India’s rate-setting meeting next week. While a cut might be too much to expect, investors and analysts will watch for softer language. US equities bounced back on Thursday after tech giant Meta announced a dividend for the first time and a $50 billion share buyback plan. Retail major Amazon’s strong fourth quarter showing helped too. The positive sentiment in the US percolated to Asia too, with major indices trading in the green zone on Friday morning. The GIFT Nifty indicates a flat or lower opening for India. FINTECHRBI’s Hammer Falls On PaytmOn Wednesday, the Reserve Bank of India (RBI) dealt a body blow to Paytm Payments Bank’s future. The regulator directed the Bank to stop most transactions from its products after February 29, while also mulling punitive steps including revoking Paytm’s payments bank licence. Unsurprisingly, Paytm shares took a shellacking in the market on Thursday. The crux: To quote The Ken, the move “nukes” Paytm's wallet, FASTag, and UPI ecosystem. Expect Paytm to take a substantial hit on its payments business (approx. 50% of total revenue), with the company estimating a worst case hit to its EBITDA at up to ₹500 crore (~$60 million). Collateral damage: This could snowball into an optics issue for its other verticals such as financial services. Paytm does not have an NBFC licence and partners with other lenders. The latter could turn sceptical of allying with Paytm post RBI’s directive, some brokerage firms say. 🎧 RIP Paytm Payments Bank. Also in today’s edition: Interim Budget lowdown. Bonus: Gen Z is reinventing the language of money. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts. ENTERTAINMENTHouse of Mouse Gets New OwnersThe Disney-Reliance deal is inching close to a finish. Viacom18 has signed a prelim agreement to buy 60% of Star India at a $3.9 billion valuation, a fraction of what it was in 2019 when Disney acquired it. Reliance will take a controlling 51% stake, while Bodhi Tree Investments will own 9%. As Sony and Zee sue and countersue each other over their failed merger, the Disney deal will help Viacom and Star cement a massive lead in India’s TV business, estimated to be worth over $8 billion (pdf) while also gaining a lead in streaming and film production and distribution. New slate: Meanwhile, Disney+ Hotstar is commissioning adult animation shows based on Indian mythological epics. This, after the platform’s third season of animated series The Legend of Hanuman released to great acclaim last month. UNION BUDGETAll In On A Win
Finance minister Nirmala Sitharaman delivered an ideal interim Budget (pdf) for a lame duck government getting ready for elections with the full belief that it is returning to power. Key numbers: Fiscal deficit for FY24 at 5.8%; FY25 target at 5.1%. Capital outlay up 11.1% at ₹11.1 lakh crore (~$133 billion). The targeted spend for FY24 of ₹10 lakh crore will fall short by about ₹50,000 crore. Tax: Barely any changes. Tax breaks, which were ending on March 31, 2024, for startups and sovereign wealth funds, will stay for another year.
GEOPOLITICSWill There Be Order In Chaos?Saudi Arabia, the UAE, Iran, Egypt, and Ethiopia have joined BRICS, about a year after an invitation to do so was extended to them. A significant achievement, not least because foes Saudi Arabia and Iran—between whom an uneasy peace was brokered by China—will be part of the same bloc that sees itself as (a) a voice for the Global South, and (b) an alternative to the West/developed nation-centric G7. Argentina, which had requested to be part of BRICS during the pre-Javier Milei administration, rescinded in December last year. Too many cooks?: BRICS is devising a framework to allow members’ local currencies for trade in order to challenge the US dollar hegemony. But as Forbes argues, BRICS doesn’t have the geopolitical and economic homogeneity G7 does (read: the India-China rivalry), and it’s likely that China will inevitably dominate the grouping’s strategy because let’s face it, it’s BRICS’ beefiest member. SUCCESSION(Not) Mama’s BoyFormer IPL chief Lalit Modi is probably having the last laugh. Once the sole dissenter in a dispute with mother Bina Modi over a ₹11,000 crore ($1.32 billion) inheritance, he’s now got the backing of brother Samir Modi. What’s happening?: The Modis are the promoters of Godfrey Phillips, maker of Marlboro and India’s oldest cigarette maker. Before he passed away in 2019, patriarch KK Modi had willed that the inheritance be split equally between wife Bina, Lalit, Samir, and their sister Charu. He’d also weaved in a caveat allowing the family trust to be dissolved if a family member wanted it. With others backing Bina’s decision to continue the trust, Lalit, who approached an arbitration tribunal in Singapore, became the only outlier. The Economic Times now reports that Samir Modi has taken the legal route against their mother for not distributing funds equally. Now, over to Charu. FYIShot down: Less than a year after it launched, news website The Messenger has shut down. It had raised $50 million to build a news business hinging on social media and search traffic. War chests: Private equity major KKR has raised $6.4 billion for an infrastructure-focused fund for the Asia Pacific region. Bain Capital will invest $7 billion in India over the next three to five years. Street cred: The co-ownership of six Indian Street Premier League franchises fetched ₹1,165 crore ($140.4 million). Team Srinagar, co-owned by filmstar Akshay Kumar, received the highest bid of ₹251 crore ($30.2 million) from Sanjay and Rohan Gupta’s SG Sports Pvt Ltd. Pack up?: Days after a Delaware judge voided his record pay package, Elon Musk is planning a shareholder vote to decide Tesla moving its state of incorporation from Delaware to Texas. Users on his platform X voted in favour of the shift. More pink slips: Video conferencing company Zoom has trimmed 150 jobs (~2% of its workforce). Identity management company Okta will lay off 400 employees or 7% of its workforce. Crypto company Polygon Labs will cut 60 jobs (~19% of its workforce) globally. . Change in the air?: Several investors of Indian edtech BYJU’s have called for an extraordinary general meeting to vote on removing the founders and changing the leadership. Maybe, maybe: Struggling telco Vodafone-Idea plans to finally launch 5G services in the next 6-7 months as the company scouts for much-needed funding. THE DAILY DIGIT418.77The Reserve Bank of India’s Digital Payments Index in September 2023. The index, with a value of 100 in the base year 2018, captures the extent of digitisation of payments in India and is published with a four-month lag. (Reserve Bank of India) FWIWWanted: Russia going after its dissidents is a tale as old as time and its latest victims are an Olympian couple. Sergey and Violetta Bida are fencers by profession and represented their homeland, Russia, in the 2021 Tokyo Olympics. Sergey won a silver medal in that competition and was awarded the Order of Merit for the Fatherland by no less than Vladmir Putin. So when they decided to leave Russia for the USA in 2023, they knew things were about to get serious. And boy it did! The couple were publicly announced as fugitives in a wanted list by Russia’s state news agency TASS after they renounced the war against Ukraine. Russian officials have warned them of ‘consequences’ and one politician even hinted at possible assassination. Yikes! Costly job: Heavy is the head that wears the crown and there’s mounting evidence of that. Multiple surveys have come out indicating the ill-effects of taking on the crown. 19 CEOs died in office in 2023, the most since 2010, and close to 2,000 were fired, as per a survey by outplacement firm Challenger. A 2021 study by the US National Bureau of Economic Research, revealed that industry recessions can reduce CEOs’ life expectancies by 1.5 years. So, how are the bosses dealing? Most brush it under the rug; but then there’s former Best Buy CEO Hubert Joly, who prioritises his health and teaches new chief executives about personal well-being at Harvard Business School. Feels like a corporate-version of Sophie’s Choice. Infinity gauntlet: No, this isn’t a piece on MCU but it does involve a gauntlet that lasted for infinity… or rather, 600 years, so it kind of feels like infinity. Evacuators in Switzerland have stumbled upon an extremely well-preserved right-handed iron glove from the 14th century. This makes it the oldest and most complete iron glove found in Switzerland. Though its origins are still muddy, there are clues that it might’ve belonged to a knight. The craft and materials used are of the highest quality, indicating the high status of the owner. Looks like cheese isn’t the only thing the Swiss-land can preserve. The Signal is free today. But if you enjoyed this post, you can tell The Signal that their writing is valuable by pledging a future subscription. You won't be charged unless they enable payments. |
Older messages
TikTok has a Universal problem
Thursday, February 1, 2024
Also in today's edition: The productivity dilemma; Budget sneak peek; China's rural banking crisis; Big Tech can't please Wall Street
Jio wants old bricks junked
Wednesday, January 31, 2024
Also in today's edition: The long trek to work; Washington vs. West Asia; All dust, no bunnies for Roomba maker; Toyota's gotcha moment
Nothing sells like nostalgia
Tuesday, January 30, 2024
Also in today's edition: The Hungary Games; Can't buy, won't buy; Game on for Warner Bros; From bust to bluster
What Netflix’s Reed Hastings learned from Ambani, Mittal
Monday, January 29, 2024
Also in today's edition: Tim Cook gets cooked; Indians develop a shark tooth; Quota wars; Big chip vs. little chip
BYJU’S gets a slice of the Pai
Friday, January 26, 2024
Also in today's edition: Tiger Tiger, not burning bright; India goes where it hasn't before; What went wrong with Sony-Zee; The Tesla-BYD switcheroo
You Might Also Like
Industry Veterans Teach How to Earn Revenue in 2024
Saturday, July 27, 2024
And how to do it in a short amount of time View in browser Spark Sign Up You don't have to learn affiliate marketing alone To become an affiliate marketer, you'll need to to create ads,
Low competition niches with high traffic potential
Friday, July 26, 2024
1.2 million visitors with a DA of 9!?
Mindsnack Ep. 6 - 4 Things That Have Helped Me
Friday, July 26, 2024
do these things.
SearchGPT Announced! (The End of Google?)
Friday, July 26, 2024
Yesterday, OpenAI announced SearchGPT, an AI-powered search engine that is a direct competitor to Google search. What does that mean for Google? What does it mean for publishers? This is the first
🎙️ Find That Pod #272
Friday, July 26, 2024
Let's discover some awesome podcasts together.
Temu may be a worthy Amazon competitor after all [Crew Review]
Friday, July 26, 2024
Q4 is approaching fast. Take advantage of the sales season and get more funding for your e-commerce business. We'll show you how on July 30, 2024 at 9:30 AM (PST). Hey Reader, It may not have the
Bitcoin 2024: All Eyes on Nashville
Friday, July 26, 2024
Marathon Digital Goes Full HODL with $100M Buy
Digiday Awards: One week left to submit your entry
Friday, July 26, 2024
Have your work viewed by judges from Google, Chipotle and more
You don’t need more capital, Reader. [Webinar]
Friday, July 26, 2024
Hey Reader, Most successful online entrepreneurs have taken risks, ie, loans, to scale their businesses to the next level. But how do you know when to borrow more money and when to hold off? This July
Influence Weekly #347: TikTok’s Secret Plan To Shake Up European E-commerce: What 40 New Hires Reveal
Friday, July 26, 2024
A Fashion Influencer Sues, Alleging a Creator Copied Her 'Aesthetic