Good morning! Lionel Messi might be great at dribbling past opponents but even he would struggle to get past this one. The Economic Times reports that the star footballer’s contract with BYJU’S may get shelved. The edtech company had signed Messi for its ‘Education For All’ campaign at an estimated fee of $5-7 million a year. However, BYJU’S financial and regulatory troubles may thwart its ability to fulfil or renew the contract. Talk about a self-goal.

🎧 Patanjali wants to buy a defence tech company (!). Also in today’s edition: crime and punishment in the metaverse. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts. 

Dinesh Narayanan, Venkat Ananth, and Soumya Gupta also contributed to today’s edition.

The Market Signal 

Stocks & Economy: There is a flurry of activity centred around India. Big pools of capital are moving the country to the top of their list of emerging market destinations. The Indian government’s ambitious infrastructure building programme and multinationals moving supply chains to the country are drawing Wall Street investors away from China and towards India. 

Meanwhile, OECD has moved its slider marginally up for India’s GDP growth in FY25 to 6.2% from its earlier forecast of 6.1%. That comes on the heels of the finance ministry projecting it to be 7%. Buoyed by increase in new business, India’s Services Purchasing Managers’ Index rose to a 6-month high of 61.8 in January, up from 59 in December. 

Asian markets were displaying a mixed trend at the open today. The GIFT Nifty indicates a flat or negative opening for India.

INFORMATION TECHNOLOGY

Wipro’s In The WITCHing Hour

In 12 years, IT services giant Wipro has changed high-profile CEOs three times. Yet, its third CEO Thierry Delaporte is struggling to juggle the need to increase revenue and margins, bring in bumper-deal clients, and also cut costs. 

His efforts aren’t working: Wipro’s profit margins are plummeting as rivals bag big clients. Senior executives are leaving, complaining Delaporte is making too many changes too fast, and to little effect.

Catch-up: Wipro is lagging behind among India’s WITCH companies: Wipro, Infosys, TCS, Cognizant, HCL (and now, others such as Accenture). It reported a significant decline in revenue and profit for the December 2023 quarter. Last week, the company began laying off hundreds of mid-level managers to improve margins. A brand value report found it was the lone WITCH member whose appeal fell in 2023. And Delaporte may not continue as CEO next year. 

FINTECH

Is Paytm Emptying Its Wallet?

A direct fallout of the RBI order against Paytm Payments Bank (PPB) could see the payments company checking out of the wallet business, a space it dominates.

Let’s talk: The Hindu Business Line (HBL) reports that the company is in talks with investors, including HDFC Bank and Jio Financial Services (the company denied the news), to sell the vertical, which was housed inside PPB. The move, per HBL, is akin to a “distress sale”, more to ensure business continuity for 330 million users. 

Firefighting: Paytm is working overtime to migrate its backend to other banks, effectively making the ubiquitous payment product a third-party app.  That could mean transaction failures, given that Paytm, in the absence of PPB, would have less control over them. Besides, with merchants (and possibly, users) migrating (mostly) to Google Pay and PhonePe, the NPCI’s deferred 30% market share proposal could be back on the table.

MUSIC

The Haves Vs. The Have-Nots

Taylor Swift made history at the 2024 Grammy Awards after winning her fourth Album Of The Year (for Midnights), breaking a tie she’d held with three-time category winners Stevie Wonder, Frank Sinatra, and Paul Simon. She also announced a new album, The Tortured Poets Department, out in April.

Other winners include Victoria Monet, SZA, Miley Cyrus, Boygenius, and tabla maestro Zakir Hussain, who bagged three Grammys, including one with John McLaughlin-led group, Shakti.

Grammy winners usually get more streams after the event, something that’d make Swift’s label, Universal—the world’s largest music group—as chuffed as a Cheshire Cat. Btw, Universal is in a war with TikTok over licensing and has pulled its catalogues (including those of Lana Del Rey, Drake, and Olivia Rodrigo) off the platform.

The Swift-Universal victory, however, comes at a literal cost.

The Signal

The music industry, including Universal, is laying off thousands of staffers as it grapples with slowing growth. The situation is worse for independent labels, which receive even more diminishing returns from streaming, all while the AI threat looms.

The problem doesn’t stop there for smaller companies. They’re now in a who’ll-blink-first situation with Apple, which is offering to pay 10% more in song royalties, but only if labels/artists record tracks in “spatial audio”. Because it’s significantly more expensive to produce, the policy may only benefit big corporations.

It's a stark reminder of the gulf between billionaire artists, their Goliath labels, and eras that once gave us artists like so, so, and so.

TECH

Virtual Abuse, Real Trauma

Now that Apple’s Vision Pro is on sale in the US, everyone is dropping reviews and sharing their experience shopping for the mixed reality headset. Apple is also reportedly considering acquiring a privacy-focused AI startup to anonymise data in photos and videos taken with the device.

No player in the virtual/mixed/augmented reality space is addressing the elephant in the room though. We’re talking sexual harassment on virtual/mixed/augmented reality platforms, something we wrote about in our hands-on experience with Meta’s Oculus Quest 2 in 2022.

*Trigger warning*: Following last month’s alleged gangrape of a minor in Meta’s Horizon Worlds, The Washington Post spotlights the critical need to treat virtual assaults as the real deal since the immersive nature of the metaverse makes such experiences just as horrifying. The problem? Laws against rape and abuse require the crimes to have taken place in the physical world for cases to even be registered.

SPACETECH

European Non-Union

Rockets are blowing up European unity, a trait, according to French President Emmnauel Macron, which is one and the same as European sovereignty. 

The problem: The European Space Agency (ESA) is funded and managed by 22 countries, including the UK. It has largely flown space cargo on the dependable heavy-lifters of the French ArianeGroup. Its subsidiary ArianeSpace is the monopoly marketer and manager of European launches. But now the race is open to all space startups. That’s why Macron has vowed to reenergise Ariane and Italy’s Avio has pulled out of ArianeSpace. 

In November, ESA decided to start a competition to build craft that will fly to and from the International Space Station by 2028. They could eventually be even crewed and equipped for missions that go much farther into deep space. Arianne could or could not be building those vehicles. There are 20 others, the best ones in Germany.

FYI

The shrinking: The number of people on the central government payroll will fall by 50,000 in FY25, largely on account of the Indian Railways shedding employees. 

More money: The government needs an additional ₹78,673 crore (~$9.5 billion) to meet FY24 expenses, including significantly more spending on food and fertiliser subsidy and to pay for work under the rural job guarantee scheme.

Catastrophic loss: The Hindu Kush and the Himalayas, stretching 3,500 km across eight countries from Afghanistan in the west to Myanmar in the east, have lost so much nature and habitat so fast that their biosphere is about to collapse, scientists have warned. 

Babus, not soldiers: The Maldives is throwing out Indian troops but wants to send over its bureaucrats. The island nation wants to renew an MoU to train 1,000 bureaucrats in India over five years. 

Reset and reload: Two years into the war with Russia, Ukrainian President Volodymyr Zelenskyy is firing the top brass of the army as well as the government. 

Family burden: Family has come to haunt British Prime Minister Rishi Sunak again. The opposition Labour Party has alleged that his links to Infosys through his wife Akshata Murthy helped the software firm expand its business in the UK.

Paydirt: KoBold Metals, an upstart miner backed by Bill Gates and Jeff Bezos, has found one of the largest deposits of high-grade copper in Zambia.

THE DAILY DIGIT

879.353

The number of days spent by Russian cosmonaut Oleg Kononenko in space, beating compatriot Gennady Padalka. Kononenko broke Padalka’s record on Sunday at 7:30 pm GMT. (Reuters) 

FWIW

Uno reverse: Well well well, look how the tables have turned. Chinese brands, once notorious for making cheap rip-offs, are now getting a taste of their medicine. Companies like Luckin Coffee and Heytea are embroiled in a long legal tussle with their copycats in Thailand and Singapore. Ganfeng Lithium, a Chinese supplier to Tesla, found its name sprawled across Nigeria’s first lithium-processing plant, when in reality it was owned by a Nigerian company named Ganfeng Lithium Industry. All this imitation isn’t flattering. China has strengthened patent protection enforcement at home with increased penalties and swift actions. For the rest of the world, this is damn funny.

Clueless: By now, everyone has been shouting from the rooftops about the dangers of artificial intelligence (AI). But you know who hasn’t been that worried? Private companies. Their whole “no need to panic” shtick was making us feel like we were overreacting. Maybe we were… after all, we didn’t lose $26 million. Confused? Allow us to explain. A ‘multinational company’ in Hong Kong lost that money to swindlers thanks to deepfake technology. They pulled this off by fabricating representations of the company’s CFO on a VIDEO CALL! If this doesn’t set the ball rolling on regulating AI, we don’t know what will. 

Dangerous path: Move over Bermuda Triangle, there’s a new claimant to the most dangerous spot in the Seven Seas. The challenger is Drake Passage, which connects the southern tip of South America with the northernmost point of the Antarctic Peninsula. The passage has waves topping 50 feet, giant underwater mountains, and turbulent conditions in general. So much so that more than 10,000 sailors have died travelling through Drake Passage so far. There’s even a monument dedicated to them at Cape Horn. Despite the treacherous waters, more cruise ships are exploring the area. Companies like Aurora Expeditions are innovating with hardier suits and ships made to (try and) withstand the conditions. Just drives home the point that you can buy your way through most things in life.