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In today’s newsletter:

• India's data protection law on the way
• IT deals hit snags as clients seek discounts
• SoftBank gains $550M from listed India bets

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The finish line has been crossed, and all that is now needed is a signature to solidify the victory.

India is set to have its first legislation ensuring the protection of citizens' privacy, as the Digital Personal Data Protection (DPDP) bill was passed by the Rajya Sabha with a voice vote today.

• The bill will become law after it receives President Draupadi Murmu's assent

Contrary to expectations of a political showdown, the deliberations over the bill in the Rajya Sabha were subdued.

• Many Opposition MPs were absent while the bill was discussed

After an hour or so of discussion, Minister for Electronics and Information Technology Ashwini Vaishnaw moved for the bill to be passed, and it was passed with a resounding "yes" from the members who were present.

Now that it is set to become law, we have an all-encompassing explainer on the DPDP Bill. This explainer touches upon how the bill aims to safeguard citizens' data, how a citizen can raise their grievances regarding their personal data, and the concerns that have been raised about some of its provisions.

One of the concerns about the bill is the provision that exempts government "instrumentalities" from its applicability.

• Minister of State for Electronics and Information Technology Rajeev Chandrasekhar clarified in an interview with us that the government will not have unfettered access to citizens' personal data except in circumstances like national security or health emergencies.

The first quarter earnings conferences of all the top Indian IT companies saw management teams trying to explain their strong outlook on demand and why it mismatched with their deal conversion timelines.

It turns out, despite IT companies' denials, industry observers have found that negotiations are taking longer as clients bargain for pre-inflationary prices and discounts on deals, as they rethink their tech budgets in a tough business environment.

Prices of transformation deals rose by an estimated 20-30% during the pandemic, according to UnearthInsight.

• For all new deals, especially those with newer clients, requests for discounts have increased by 50%

However, IT companies are only agreeing to these requests for 30% of the instances, UnearthInsight said.

While there have been no significant attempts by companies to roll back price increases so far, clients are increasingly pushing back on these increases and are not willing to accept further price hikes, analysts said. 

• The industry is hopeful that inflation will start to cool down in the next couple of quarters, which will drive demand

Even though the recent banking crisis had a limited impact on Indian IT companies, Moody's latest downgrades of small and mid-sized North American banks could have a moderate effect.

Go deeper

SoftBank seems to having a good run lately.

Although the company has not made any investments in its third-largest market so far this year, it has certainly benefited handsomely from its existing bets in India.

The fair value of SoftBank's holdings in its listed India portfolio companies increased by $544 million in the first six months of 2023.

• SoftBank has Paytm, Zomato, Delhivery and Policybazaar in its listed India portfolio
  
  
• The increase in fair value was triggered by a sharp rally in share prices of these companies

In addition to listed companies, SoftBank also internally marked up the fair value of almost all sectors in its private portfolio, barring logistics, during the June quarter.

• SoftBank has unrealised gains of $1 billion in the June quarter from its private market investments

The rise in the fair value of its stake prompted SoftBank to monetise some of its bets, and the Japanese investor has been doing so.

In 2023, it has already sold about 4% of its stake in Paytm through open market transactions. It also plans to trim some of its holdings in Zomato.

• The share prices of these companies have surpassed SoftBank's initial investment costs

Meanwhile, in private markets, SoftBank sold a part of its stake in Lenskart to ChrysCapital.

• Alphabet's Google and Universal Music are in talks to license artists' voices and melodies for artificial intelligence-generated songs.

• Generative AI models have become increasingly popular, but their environmental impact has been largely overlooked.

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