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Also in the letter:
■ GCCs push IT cos’ biz
■ Meta to tackle spam with AI
■ Blinkit warehouse raided
Startups seek advice on IPO timing in choppy markets
Multiple new-age companies looking to go public are seeking counsel on their next moves in response to the stock market volatility following the general election results on Tuesday.
Driving the news: These companies are looking for advice on the timing of their public listings even as they remain confident about India’s macroeconomic prospects, founders, investors and investment bankers told us.
Catch up quick: The ruling Bharatiya Janata Party (BJP) won in 240 parliamentary constituencies in the 543-seat Lok Sabha, but failed to secure an outright majority. It is now set to form a coalition government with regional parties – a factor that has caused some unease in the markets. Among those priming for an IPO are omnichannel retailer FirstCry, food and grocery delivery platform Swiggy, electric vehicle maker Ola Electric, and ecommerce software company Unicommerce.
![Startups GFX Startups GFX](https://img.etimg.com/photo/msid-110780664/Startups GFX.jpg)
On solid footing: “There is a lot of money in public markets and there is an appetite for new-age stocks. So good companies with fundamentals in place will get listed and attract investor interest,” said a startup founder. Stakeholders also pointed out that the upcoming Union Budget will be the next major milestone in getting a pulse of the new government’s economic agenda.
Quote, unquote: “It’ll be a wait-and-watch on some of the issues where the government has taken a hard stance…such as taxation. There will be more signals in the Budget next month, but broadly on some of the major issues impacting startups and investments, it seems there will be policy stability,” a Gurugram-based early-stage investor said.
Also read | A dozen consumer companies line up IPOs amid a thriving stock market
Fintech NBFCs eye balancing act as RBI action hits core business
![NBFCs_lending startups_MyShubhLife_InCred Capital_NeoGrowth_loans_THUMB IMAGE_ETTECH NBFCs_lending startups_MyShubhLife_InCred Capital_NeoGrowth_loans_THUMB IMAGE_ETTECH](https://img.etimg.com/photo/msid-110780684/NBFCs_lending startups_MyShubhLife_InCred Capital_NeoGrowth_loans_THUMB IMAGE_ETTECH.jpg)
At a time when the Reserve Bank of India is putting brakes on the unbridled growth of unsecured lending, a bunch of mid-sized NBFCs which were focused on this business might need a major recalibration. They might also need to relook their partnerships with fintechs which helped them grow exponentially over the last two years.
Driving the news: Balance sheet lenders like DMI Finance, Vivriti Finance, InCred Capital and a few others have significantly reoriented their business towards unsecured consumer loans and business loans over the last two years. This has helped them grow and report strong profits. DMI Finance has 82% of its assets under management (AUM) in unsecured loans. For InCred, too, retail loans stood at 82%, compared to 53% in 2021.
![NBFC NBFC](https://img.etimg.com/photo/msid-110780688/NBFC.jpg)
Revival story: Unsecured loans have helped many of these lenders frame a revival story, coming out of the pandemic which had hurt their business. Like NeoGrowth which turned profitable in FY23 by leveraging the growth in digital payments to lend to small businesses. This move also helped InCred post Rs 129 crore in net profit in the first half of FY24.
Inorganic growth opportunities: While most of these NBFCs built a strong tech backend to process loans quickly, some acquired fintech startups to build these capabilities. MyShubhLife was acquired by Ugro Capital last month. DMI Finance bought pay-later startup ZestMoney in 2023, while InCred had acquired consumer lending app Qbera back in 2020.
Indian GCC boom lights up prospects of IT firms too
![Global Capability Centres Global Capability Centres](https://img.etimg.com/photo/msid-110780733/Global Capability Centres.jpg)
With India emerging as a hub for global capability centres (GCCs), IT services companies are cashing in, setting up projects, looking for partnership opportunities, and even acquiring such centres.
What’s happening: A host of Indian IT firms are getting greater revenue momentum from GCCs in the country, while a few others are helping their global clients set up GCCs here.
- IT engineering firm GlobalLogic’s GCC clients more than doubled last fiscal; its GCC business grew 90%
- Happiest Minds’ India revenue was 16.3% in FY24, up from 14.1% in FY22, partly due to increased GCC business
- LTTS recently won a deal from a global agricultural and construction equipment maker to help set up a GCC
- Tata Technologies will form a joint venture with BMW to set up a software and IT development hub
![GCCS GCCS](https://img.etimg.com/photo/msid-110780748/GCCS.jpg)
Rationale: Vikram Ahuja, cofounder of business consulting firm ANSR, explained the merit of this relationship. “These collaborations allow businesses to leverage best-in-class people and process solutions from IT providers while ensuring in-house teams can maintain critical control, continuity and provide strategic direction,” he said.
Will use AI tools to tackle growing WhatsApp spam: Meta executive
![Meta VP Meta VP](https://img.etimg.com/photo/msid-110780753/Meta VP.jpg)
Nikila Srinivasan, Meta vice president of business messaging
Meta has seen strong growth in business accounts on its networks, especially on WhatsApp — and with that comes a barrage of spam for users. Nikila Srinivasan, Meta’s vice president of business messaging, said the company will use artificial intelligence (AI) to tackle this issue.
Privacy first: “From WhatsApp’s perspective, a core principle we follow is that anything has to be reliable and private. Anything that invades our privacy does not have any space on the platform. Our expectation from the businesses is that they have explicit permission before they reach out (to users),” Srinivasan said.
New features: The number of conversations between users and small businesses using Meta’s range of business messaging services has doubled over the last year in India. The company now plans to add a calling feature for business messaging to enable users to talk directly to a human representative for complex transactions.
Other Top Stories By Our Reporters
![Blinkit Blinkit](https://img.etimg.com/photo/msid-110780757/Blinkit.jpg)
Food safety violations at Blinkit warehouse: Telangana authority to issue notice | Telangana’s Commissioner of Food Safety on Thursday said it will take action after multiple violations were detected at a warehouse near Hyderabad being used by Zomato’s quick commerce platform Blinkit.
RBI sets up panel to track online payment frauds; AP Hota to head committee: The RBI has set up a committee with industry participation to help build a digital public infrastructure platform, specifically to tackle the issue of payment frauds, two people in the know told ET. The panel will be chaired by Abhaya Hota, the first CEO of National Payments Corporation of India (NPCI).
BNPL startup Simpl undertakes another round of layoffs, rejigs senior leadership: Bengaluru-based consumer credit startup Simpl has let go of 30 more employees a month after it laid off 160 people. The company conveyed the information to these employees in one-to-one meetings on Thursday.
Wipro bags $500 million deal from US communications provider: IT major Wipro has bagged a five-year deal worth $500 million from a US-based communication service provider, the company said in a filing. As part of the deal, Wipro says it will provide managed services for some products and industry-specific solutions.
Global Picks We Are Reading
■ Google looks to AI to help save the coral reefs (TechCrunch)
■ US antitrust enforcer says ‘urgent’ scrutiny needed over Big Tech’s control of AI (FT)
■ Scan to donate: Brazil’s instant digital payment system brings relief to flood victims (Rest of World)