One quick thing: Second tranche of $50 million bonanza incoming for 2,000 Swiggy employees

In today’s newsletter:

• Byju’s vacates largest office space; gets a breather from lenders
• GST on real-money gaming: Karnataka Govt divided
• A washout Q1 for Indian IT

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Debt-laden Byju's just breathed a sigh of relief as the months-long tussle between the edtech company and its lenders showed some hope of a resolution.

After months of never-ending clashes, Byju’s and 85% of its lenders have finally agreed to amend the $1.2 billion Term Loan B.

• The loan will be restructured by August 3, according to a statement by the lenders

While things have started to look up, Byju’s is yet to close a long-pending funding round, which is a much-needed infusion essential to tide over the immediate liquidity crunch.

Meanwhile, to sail through, the cash-strapped company has been axing costs massively – laying off employees, delaying PF and incentive payments, and so on.

• More recently, the company vacated its largest office space in Bengaluru, a 5.58 lakh square feet property in Kalyani Tech Park

The move is likely to save the company close to Rs 3 crore in monthly rent.

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The Karnataka government is divided over the GST Council's recent decision to levy a 28% tax on the online real-money gaming sector.

On one hand, revenue minister Krishna Byre Gowda supports the decision, saying that online gaming falls under betting. On the other hand, IT-BT minister Priyank Kharge has criticised the decision, saying that it will stifle the growth of the industry.

Kharge has stressed the need for clarity on the matter and expressed his willingness to arrange joint discussions to bridge the gap. 

• He believes that players may seek options outside the country if the industry faces stringent restrictions, jeopardising the $1 trillion digital economy target set by the government

The GST Council's decision has been met with widespread criticism from the real-money gaming industry.

• Industry executives and associations have warned that the move will "wipe out the entire industry and lead to job losses"

Investors have also expressed concerns about the decision, saying that it could lead to a potential write-off of billions of dollars in capital invested.

At this point, it remains uncertain what actions the Karnataka government can take. However, one thing is evident: the game is not over yet.

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The first quarter numbers of Indian IT majors were a downer, as expected, with some unpleasant surprises.

• Among the five Indian IT companies that have reported their numbers so far, two have seen revenue growth rates go into the negative territory

However, in a paradoxical situation, companies are seeing record-high deal wins, along with delayed start dates, project rampdowns, and postponement of discretionary spending.

The shocker this quarter was Infosys’ steep revenue guidance cut for the year, with analysts expecting more downgrades going forward. 

• This comes as customer sentiment has shifted, with discretionary spend taking a significant step backwards, and firms looking to adopt strategies to save money, according to Everest Group’s Peter Bendor-Samuel

While HCLTech is maintaining its guidance for the year for now, India’s largest IT services company TCS, as well as LTIMindtree, have said that double-digit growth looks difficult.

The pain in the sector was also visible in their (lack of) hiring, with Infosys, Wipro, HCLTech, and LTIMindtree all seeing a sequential decline in their headcount since last quarter.

• Cumulatively, the four firms have seen over 20,000 people exit the companies on a net basis
  
  
• This is even as attrition has continued to trend downward

Why? Companies had significantly overhired previously, and due to a lack of visibility on the demand environment going forward, they are now choosing to utilise their bench, deploy freshers, increase utilisation, and hire only when necessary.

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With their high speed, affordable pricing, and comfortable travel experience, Vande Bharat trains are attracting more and more passengers on short-distance routes.

• Airfares on routes where Vande Bharat trains operate have fallen by 20-30%

Industry experts say that Vande Bharat trains are not likely to pose a threat to airlines in the long term, but they will force airlines to carefully plan their domestic networks.

PS: Have you taken a Vande Bharat train yet?

Find out more

• OpenAI will release the Android version of ChatGPT this week, giving users access to the AI chatbot.
  
  
• Major publishers are teaming up to sue AI companies for using their content to train generative models and are also advocating for new governing regulations.

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