⚡ Supreme Court upholds demonetisation, Mamaearth the new Paytm?

🤩 The Good

The Supreme Court upholds the 2016 demonetisation by a 4:1 majority. The judges ruled that the government’s decision to demonetise ₹500 and ₹1,000 notes had a reasonable nexus with the objective of curbing black money and fake currency. The court also noted that there had been a six-month consultation between the Centre and the RBI. One dissenting judge, however, called the move “unlawful” and said that there was no independent application of mind by the RBI.

The US Federal Communications Commission (FCC) praises India’s decision to ban TikTok. FCC commissioner, Brendan Carr, said that India had created an “incredibly important precedent” by banning TikTok in 2020. The US has also been working on a regulation to ban TikTok due to national security concerns. Carr called TikTok a “surveillance tool” and said that the US needed to follow India’s lead in removing other nefarious apps, too.

The government wants Apple to manufacture MacBooks and iPads in the country. Sources from the IT ministry have said that the government is considering increasing the production-linked incentive scheme for IT hardware to ~₹20,000 crore from ₹7,350 crore. The intention is to make the most of the souring relationship between Apple and China. Apple’s manufacturers and suppliers have created ~50,000 direct jobs in India since the current incentive scheme came into effect in August 2021.

👿 The Bad

National unemployment reached a 16-month high in December 2022. The country’s unemployment rate rose to 8.3% in December from 8% in November, as per the Centre for Monitoring Indian Economy. Unemployment was highest in Haryana (37.4%), following by Rajasthan (28.5%) and Delhi (20.8%). But the numbers aren’t as bad as they seem since they come with a healthy increase in labour participation.

Mamaearth IPO raises valuation concerns. As Honasa Consumer Ltd. prepares to go public, people are worried that it might be another Paytm in the making. The company raised $52M at a $1.2B valuation in January 2022 and is now seeking a $3B valuation. Considering it had just $3M in profits in 2022, the valuation is 1000x the profits.

🤔 The Wait-and-Watch

2023 might be the breakthrough year for electric vehicles (EVs). Six cars from Hyundai, Citroën, MG, Skoda, Tata, and Mahindra to be launched, 24+ two-wheelers and three-wheelers expected to be released, and growing commercialization of electric buses and trucks: there’s a lot happening for EVs this year. But widespread adoption is likely to take time due to high vehicle and battery costs, concerns about range, and other issues.

Swiggy’s revenue grew 2.2x to ₹5,705 crore in FY22 from ₹2,547 crore in FY21. 83.3% of the revenue (₹3,444 crore) came from its food platform services, which include sale of food, advertisements, subscriptions, and more. Losses also grew 2.2x to ₹3,629 crore from ₹1,617 crore in the previous FY, at a time when Zomato is seeking to become profitable. The company may lay off 250+ employees, or ~5% of its staff, in January.

IMF expects a third of the world to face a recession this year. The Managing Director of the International Monetary Fund, Kristalina Georgieva, has warned that 2023 will be “tougher” than 2022, with economies slowing for the US, EU, and China. But India is expected to navigate through these global headwinds with a ~7% growth rate, despite the global economy projected to grow at just 2.7%.

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