This Week in Review ☕️: Coalition government a big hurdle for Indian President’s third term in power | The debt trap haunting Indian tech startups | Microsoft launches new Xbox Series X All-Digital

Quick Bites:🤓

Politics🤝: As PM Modi’s third term gets underway, the big question: Can he turn a coalition to his advantage? 🔍

Facing the prospect of running a coalition government for the first time, the PM is likely to face challenges on three fronts: NDA allies, a stronger Opposition, and navigating party-RSS relations. 🙌🏻

With Narendra Modi elected Prime Minister for the third straight time, this time at the head of a coalition government, the question uppermost on people’s minds as he took the oath of office and secrecy at Rashtrapati Bhavan on Sunday was: Can Modi be a coalition-builder?

Key Highlights, reported by BBC:

💡India is no stranger to coalition governments.

💡Some of the world’s largest coalitions, comprising between six and a dozen parties, have been formed in the world’s most populous democracy. 

💡From 1989 to 2004, six general elections produced no single-party majority. Some of these coalitions have been particularly chaotic: between 1989 and 1999, eight were formed and many quickly collapsed.

💡But some of India’s most significant economic reforms and highest growth rates have come under coalition governments, led by both the Congress and the Bharatiya Janata Party (BJP).

Our Thoughts 💡:

☝🏻We believe it’s unlikely to be smooth sailing for Mr Modi in a coalition.

🤝The two allies that Mr Modi is most dependent on are two regional parties, Janata Dal (United) and Telugu Desam Party (TDP). They have 28 seats between them. Both are led by veteran, astute leaders – Nitish Kumar and N Chandrababu Naidu, respectively – who have previously served in BJP-led federal coalition governments and then quit over differences with the ruling party, specifically over Mr Modi.  

🙌🏻Politics makes for strange bedfellows – India is no stranger to that fact.

🤐Coalition governments dependent on just two or three allies are particularly vulnerable to collapse if even one withdraws support.

We believe a coalition government under Mr Modi could contribute to a healthier democracy. It could reduce the prime minister’s dominance, decentralise governance, increase checks and balances, embolden the opposition, and make institutions like the bureaucracy, judiciary and media more independent. ⚖️💵

“We will have to wait and see,” says Sandeep Shastri, a political analyst. “We have to view this through the lens of current circumstances, not past alliances.” 🔍

Business & Tech 📈: The debt trap haunting Indian tech startups- Are we Failing?

Loss-making startups taking on debt is a sure-shot recipe for disaster😑.

In the era of easy money and low interest rates, investors and lenders drastically lowered the bar on asset quality as they were desperate to fill the hole in their P&L ( profit & loss). But lenders who burned their fingers will never come back to the product.

Eventually, such borrowers will run out of money and won’t even have the funds to pay the interest.🧐

Loans work more for old economy businesses, those in sectors like manufacturing and industrials, as they have a predictable line of profits. For technology startups which are typically loss-making, drawing in debt is fraught with danger, but sometimes also the last resort.

Tech startup Byju’s, budget hotel chain Oyo, epharmacy Pharmeasy, and others, who have taken loans because equity funding was difficult to snag, especially at steep valuations are moving towards bankruptcy.

All this made me think of how the current downturn is different from any other in India, as many high-burn, and richly-valued tech firms have used financial instruments like TLBs, convertible notes, and structured transactions to wade through tough times.🤯

Our Thoughts 💡:

An investment banker told me that new financial instruments which Indian startups were loath to touch till a few years ago, are now commonplace. “Companies are much larger now than they were five years ago. With hundreds of billion dollar businesses, new types of financing have come up. Till a few years back, equity rounds were the only safe way of raising funds, but now it’s different. This is a part of the growing up process,” he said. 

It’s to be seen how this growing up process turns out for many debt laden Indian tech startups. But for now, all those who took on debt will find it hard to survive this downturn.😶

Consumer Trends 🛒 : Microsoft launches new Xbox Series X All-Digital, and special ‘Galaxy Black’ edition console 🎮

Microsoft has introduced a white all-digital version of the Xbox Series X, featuring identical performance to the original model without a disc drive. This announcement was made during the Xbox Games Showcase by Xbox president Sarah Bond.

Well when it comes to Xbox, anyone who is not going crazy obsessive is considered 🤒

Microsoft has unveiled a new white, all-digital version of the Xbox Series X. This model does not include a disc drive and offers the same performance as the original Xbox Series X. It features 1TB of storage and is priced at $449.99. 

There have been leaks suggesting potential upgrades to the console’s heatsink, but these details will likely be confirmed through teardown reports. The Galaxy Black special edition Xbox Series X, which includes a disc drive, offers the same speed, performance, and features as the original Xbox Series X but with twice the storage and a unique design.

This model will launch later this year at $599.99. Xbox hardware chief Roanna Sones highlighted these features in a blog post. The introduction of the white Xbox Series X may indicate that Microsoft has canceled or delayed the refreshed version of the Xbox Series X, codenamed ‘Brooklin,’ which was mentioned in documents from the FTC v. Microsoft case last year. This unannounced refresh featured a more cylindrical design and was intended to be all-digital, with a new controller and Xbox Wireless 2 connection, priced at $499.

Our Thoughts 💡:

Time to get our hands on this beauty 😎

Quicker Bites:

• Hong Kong’s Identity Crisis Fuels $270 Billion Property Wipeout
• IAG Offer Fixes to Win EU Nod for €400 Million Air Europa Deal
• Apple Debuts AI Tools, Including ChatGPT Tie-Up
• Indian PM Modi Opts for Policy Stability With Familiar Faces in Cabinet
• As Banking Moves Online, Branch Design Takes Cues From Starbucks.
• Malawian President Says Vice President Dies in a Plane Crash.