Sunil Kataria, who heads India and SAARC business at Godrej Consumer Products, said that after 86 per cent of the country's currency stash went out of circulation with one fell stroke, consumers started to focus on basic necessities and essential commodities in preference to discretionary products.

According to Kataria, the FMCG distribution structure in India is layered with around 45-50 per cent of the sector's business being done through a multi-layered indirect wholesale channel, through which most of Indian FMCGs reach around 9 million outlets. A large swathe of this wholesale business transacts in cash and immediately collapsed with the announcement of demonetisation.

Kataria, however, expressed the hope that consumption of basic essential items, food, staples and products like soaps would bounce back sooner though discretionary items would face a stormy future well into next year. "The wholesale distribution channel will be hit by a medium-term drop. But I guess some stability, some equilibrium and some new business model will be found over a period of time," he observed.

Kataria reckons that the big event - demonetisation - will change the trajectory of modern trade in India.

"Modern trade, which has been in India for more than two decades, has struggled at around 7-8 per cent of the salience in FMCG business.... I would not be surprised if over the next 12 to 18 months, modern trade moves into a 13-14 per cent kind of salience and sort of stabilises there. Even e-commerce now is likely to take a leap in India in terms of FMCG business. So, these are the two things which will happen on the channel on the positive side," Kataria added.

Harsh Goenka, chairman of RPG Enterprises, thinks that the worst impact of demonetisation will be in the unorganised sector, which isn't represented in the markets. "People have been inconvenienced - even those who have access to debit or credit cards. We will have to endure this bumpy ride for some more time before we become a more efficient economy."

The contours of the real estate sector - which has been a magnet for cash-based dealings - will change forever, said M. Murali, managing director of Shriram Properties.

Murali believes that the unorganised segment of the real estate market and the players reputed with weak governance practices will be completely wiped out. Only the reputed developers will survive, creating a "demand high, supply less" sort of situation, more particularly in mid-market and affordable housing segment as there will be fewer players on the ground.

Home buyers will need to realise this aspect and understand that "pricing" will become a critical factor in the current scenario. No player will give up the chance to offer the best possible price to secure business. This means that bargain hunters could make a killing. But it also means that prices will not drop precipitously either since the shakeout will leave fewer players in the market.

Buyers will have the best time in 2017. With surplus liquidity and lower cost of funds for banks, lending rates will come down, which is great for the realty sector. Banks may further relax their margin requirement stipulations for home loans. "Home buyers will find it easy to get housing loans. Consequently, demand for housing will go up," Murali said.

-OVERMATTER-

Wealth managers are also reconfiguring their strategies to grab investment business.

"There are two type of themes which seem to be taking shape - one, demonetisation can lead to an opportunity where organised sector consumption-linked companies could structurally benefit and, two, a potentially weak rupee coupled with a potential expansionary US fiscal policy could actually make export plays interesting in 2017," said Rajesh Iyer, head of investment advisory services and family office at Kotak Wealth Management.

"Volatility is expected to continue and, thus, we recommend sticking to one's strategic asset allocation. The core mutual fund allocation in equities should be in large cap coupled with bottom-up based managed strategies diversified across carefully selected equity managers. In the case of debt, the core should be built around a mix of high rated and credit accrual strategies," Iyer added.

"As of now, we expect one rate cut of 25 basis points in the first quarter of 2017. However, the road could by bumpy on the way," Iyer said.