Demonetization fallout in numbers, Airtel-Telenor’s deal talk, a rate war begins, and other India news

Hard data: The first of the numbers that show the impact of Prime Minister Narendra Modi’s demonetization drive are out and the numbers are pretty much as expected. According to the think tank CMIE, investment proposals have sharply dropped to 1.25 trillion rupees, compared with a usual quarterly trend of 2-trillion plus. The Purchasing Managers Index (PMI), which is one of the smartest indicators of manufacturing also shows a dismal picture. Indian manufacturing contracted for the first time in a year in December, which Nikkei, the owner of the PMI index, attributed almost entirely to the note ban. To be fair, this was not entirely unexpected. That there will be a short-term impact of the ban on the economy was known, the question now is how long it will last. (Pic credit: Mint)

Telecom mergers: Industry leader Airtel is in talks to take over the Indian business of Norwegian telecom company Telenor. For Airtel this is a quick and easy way to expand its 4G footprint, something that is being threatened by the entry of Reliance Jio. For Telenor, it’s a simple exit from a cut-throat and expensive business in India. The Scandinavian company owes 37 billion rupees to the government and to its lenders and had to mark down  the value of its Indian business by 50 billion rupees over the past year. As part of the deal with Airtel, the Indian company will take over 12 billion rupees of its debt while the rest has to be cleared by Telenor. We can see Telenor taking the deal it gets, especially as it missed out on the opportunity to strike a deal with its rivals earlier.

MuSigma: The upheaval in the data analytics company hasn’t hurt its bottom line, if its filings are any indicator. It has reported a 22 percent increase in its profit in the year 2015-16, the year when founder Dhiraj Rajaram was sued by an investor and when the two founders divorced. Dhiraj’s ex-wife and co-founder Ambiga left the company and several other top level officials followed suit. It does look like things are coming back on track at this Indian unicorn.

Chart of the Day: Farmer suicides in India in 2014 and 2015 rose 42 percent. The two years have been the driest in recent memory, leading to widespread crop failure. (Pic Credit: Mint)

Cheaper money: Other banks are now following State Bank of India and cutting interest rates - the latest to join the bandwagon is ICICI Bank. While, on the one hand this points to a rate war, on the other, it looks like banks have taken PM Modi’s admonishment to heart.

Ola Exits: It isn’t just startup posterboy Flipkart that seems to have been having trouble holding on to its high profile international hires. Olacabs, the Softbank-funded Uber rival, has just had two high profile exits. The first was Sundeep Sahni, its head of new initiatives who joined from Indonesian e-commerce company Lazada, and he was followed by Abhimanyu Rawal, head of its luxury cab business. Ola remains tight-lipped about both exits even as speculation heightens.

Cover Image: The faces of demonetization. A crowd waits to exchange demonetized Indian currency, show their old 500 and 1000 Rupee notes near the closed gates of Reserve Bank of India in Bangalore on January 2, 2017 after acceptance of the banned notes at banks and RBI ended two days ago.

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