Byju's quest to settle the $1.2 billion TLB feud might come at a steeper price. The embattled edtech firm might have to pony up an additional $50-60 million to service the increased interest rate it has offered to conclude the revised terms for the deal. This and more in today’s ETtech Morning Dispatch.
A clutch of domestic and foreign investors backing online gaming companies in India has sought a meeting with Prime Minister Narendra Modi to voice their concerns on the 28% GST levied on the industry.
Some good news to chase away the Monday blues. Remember the thousands who lost their jobs globally? According to experts, a big chunk of those roles could move to outsourcing hubs like India in the coming months. This and more in today’s ETtech Morning Dispatch.
Exclusive: Reliance JioMart lays off 1,000 employees; govt groups may submit AI rules framework soon
Layoffs have now hit Reliance Industries, with its wholesale format JioMart sacking over employees, as per people in the know. This and more in today’s ETtech Morning Dispatch.
TCS reported a sequential revenue increase of only 0.6% in constant currency, and the employee cost as a percentage of the revenue went up sequentially from 55.8% to 56.9%.
TCS CEO Rajesh Gopinathan unexpectedly resigns, K Krithivasan to take over; e-pharmacies look to make a case to health ministry
Under Gopinathan's tenure the IT services major's share rose over 160%. His resignation will be effective on September 15, 2023.
TCS chief human resources officer Milind Lakkad said the company, which employs over 6 lakh people, will be announcing hikes similar to earlier years.
The government may come up with ‘negative list' of countries where cross-border data flow will be disallowed, the minister of state for electronics and IT, Rajeev Chandrasekhar told ET. This and more in today’s ETtech Morning Dispatch.
Exclusive: Byju’s offers to pay higher interest rate on $1.2B loan; Rajesh Gopinathan’s ops model may have led to unease at TCS
Happy Monday. Byju’s has held discussions to pay higher interest rates to its lenders for the $1.2 billion loan the company picked up in November 2021, per sources in the know. This and more in today’s ETtech Morning Dispatch.
TCS will not lay off its employees, but will also look to recruit impacted workers, according to Chief Human Resources Officer of TCS Milind Lakkad.
Accenture is usually seen as a bellwether for the global IT sector, and analysts gauge the prospects for the Indian IT sector based on the global firm’s commentary and business outlook.
With macroeconomic headwinds stalling growth, hiring across the IT sector is likely to take a hit in the coming months. And with no green shoots propping up anywhere, a respite is nowhere in sight.
CaratLane Trading is under the lens of the Enforcement Directorate (ED) for alleged violation of Foreign Direct Investment (FDI) regulations. The omnichannel retailer has challenged a show-cause notice issued by the investigative authority, sources tell us. This and more in today’s Morning Dispatch.
One of the world’s largest crypto lenders, Genesis froze withdrawals in November after the spectacular collapse of FTX.
OK, Tata. A day after India’s largest tech company Tata Consultancy Services (TCS) kicked off the earnings season with subdued numbers, CEO & MD K Krithivasan sat down with ETtech, talking about everything from the latest recruitment scandal in the company to macroeconomic indicators. This and more in today’s ETtech Morning Dispatch.
Perhaps what could turn out to be one of the most crucial acts for Digital India was undertaken by the Indian Parliament through the passage of the Digital Personal Data Protection Bill, 2023 earlier this week. While the law will impact every entity in this country that deals in the personal data of Indian citizens, tech companies and consumer facing startups are perhaps going to be impacted the most.
Startups slam Google’s ‘cosmetic’ changes to Android; tech firms oppose parts of Delhi’s draft aggregator policy
On Wednesday, Google announced it would make a slew of changes to Android in India to comply with a ruling by the country’s competition watchdog last October, which found the tech giant guilty of abusing its market dominance. Now, a number of Indian startups have accused Google of using “delaying tactics”, saying its changes to Android are merely cosmetic.
In a move that Vijay Shekhar Sharma no doubt hopes will please regulators and convince them to greenlight the Paytm founder’s business plans, Ant Financial has transferred a 10% stake in the fintech major to an entity owned by Sharma. The transaction will reduce Chinese representation on the cap table of One 97 Communications, Paytm’s parent. This and more in today’s ETtech Top 5.
Data from Jefferies shows a cumulative 4.6% dip in sequential revenue from the vertical across IT majors, the highest vertical-wise dip compared to all other segments, while revenue from Banking, financial services, insurance (BFSI), which is the largest revenue contributor for the Indian IT industry — saw revenue declining by a lesser percentage — 0.8% during the same period.
Internet industry body IndiaTech, which represents a clutch of startups and VC investors, also said that the longer holding period for unlisted securities to be considered long-term assets means angel investors have to pay up to four times more tax if they sell a stake in an unlisted company after holding it for 18 months.
With SoftBank and Malaysia’s Khazanah pulling the plug on GoMechanic funding round after EY flagged issues like inflated revenues, fictitious garages, the startup has admitted to making what its founder Amit Bhasin called “grave mistakes”. Bhasin also confirmed that the firm will sack about 70% of its employees as its investors including the likes of Sequoia, Tiger Global, Chiratae Ventures, have initiated a financial audit of the firm.
Fist bump, on hump day. In a major setback to India’s online gaming industry, the GST Council decided to levy a 28% tax on the full value of monies paid by users, a move industry stakeholders have termed “unconstitutional and irrational”. This and more in today’s ETtech Morning Dispatch.
The crypto industry meanwhile has asked the government to reduce the 1% TDS on crypto transactions, and review income tax provisions to allow investors to offset any loss incurred during the transfer of the virtual asset against income,
ShareChat sacks over 500 employees; Paytm Payments Bank gets RBI nod to be Bharat Bill Payment Operating Unit
On Monday morning we reported that ShareChat was set to join the growing list of Indian startups that have laid off employees amid a brutal funding winter. Later in the day, CEO Ankush Sachdeva told employees in an email that the company was laying off over 500 people or about a fifth of its workforce.
N Chandrasekaran, Tata Sons chairperson, informed shareholders during the TCS Annual General Meeting (AGM) that the company has sacked six employees and banned as many staffing firms after allegations by a whistleblower surfaced a recruitment scam. This and more in today’s ETtech Morning Dispatch.
While the initial buzz was that JFS would start off with a lending business given that it has an NBFC licence, the joint venture announcement stumped many.
India’s startup landscape, meanwhile, is caught in a time warp, with embarrassed investors marking down their stakes in Byju’s, an online education company collapsing under the weight of its own reckless growth.
Great resignation was a fraud; not sure about a great layoff trend either! Digitisation super cycle just started: Manish Sabharwal, Teamlease
"My sense is that domestic consumption right now and IT are the two engines. So sales, customer service and logistics are where we see the fastest hiring and where the most open positions are. The interesting part is it is not just in 50 cities, we probably have employees in 4,000 cities but our 400 cities are now starting to look like places where demand is. So is this the second tier, third tier are just saving less and consuming more or is there more income? It is still too early to say."
This week was Dunzo’s worst ever since it pivoted to quick commerce with Dunzo Daily in 2021. At ETtech, we have been closely tracking the Reliance Retail and Google-backed firm. What has come to pass has been in the making for a while.
Every silver lining has a cloud. Infosys announced its first quarter results on Thursday, reporting an 11% rise in profit on-year. However, the company cut its revenue guidance, highlighting the macro challenges for the IT sector. This and more in today’s ETtech Morning Dispatch.
While the fallout from Apple’s move is still playing out, there’s little doubt it has delivered a swift uppercut cut to Meta’s once-invincible ads business. The only consolation has been that Meta can still track its users’ activity within Facebook or Instagram to show them targeted ads.
The software services behemoth said currency headwinds and wage inflation had a direct impact on its decision to lay off employees.
Troubled edtech major Byju’s said it has appointed Rajnish Kumar, former SBI chief, and ex-Infosys CFO Mohandas Pai to its Board Advisory Committee. This and more in today’s ETtech Top 5.
In the last few months, most IT services companies have taken a tough stance on the practice of employees moonlighting, with cross-town rival Wipro letting go off 300 employees for working for competition.
CEO Mark Zuckerberg took the blame for the company’s first-ever mass sacking, saying he was guilty of over-optimism about its future after growth surged during the pandemic.
Futile for IT firms to prevent moonlighting: Rajeev Chandrasekar, Wipro rolls out annual hikes for FY22, TCS wants staff back in office
Ride-hailing company Ola has decided to not lay off the 200 engineers the company was earlier planning to let go, according to sources in the know. We had reported on September 19 about these 200 engineers being fired across its ride-hailing and fintech businesses in a fresh round of layoffs.
By calling out the widespread adoption of private crypto currencies as a risk to monetary stability, the RBI has indicated to the market that its stance will only get harder going forward.
Draft Digital India Act to open for public consultation soon; concerns raised over Digital Competition bill
When India’s Information Technology Act came into being in October 2000, Facebook was four years away from its inception, the first iPhone wouldn't be launched for the next seven years, and the Nasdaq was experiencing an unprecedented implosion of the dotcom bubble. The internet has changed a lot since. Now, to replace the IT Act of 2000, the government is bringing the Digital India Act, the draft of which will be open for public consultation in the next two weeks. This and more in today’s ETtech Morning Dispatch.
After its failed ZestMoney acquisition, PhonePe is kickstarting its credit journey with merchant lending.
The quantum of variable pay during Q4 has taken a hit for many companies as they struggle with extended deal closure cycles and a cautious spending environment.
The number of female employees increased 6.5% at these IT companies in FY23, outpacing growth in their total headcount, which was 5.9%, according to a survey commissioned by ET and conducted by staffing firm Xpheno.
Exclusive: Airbnb’s Brian Chesky on India’s potential; over 50% staff at Indian unicorns seeking jobs
Bouncing back from Covid-19, Airbnb in 2022 saw a 70% growth in overnight bookings in India, one of its biggest markets, CEO Brian Chesky told us in an exclusive chat. This and more in today’s ETtech Morning Dispatch.
The company's promise to continue with the normal wage hikes will hit the operating profit margins by a further 1.70-1.75% in the June quarter, its chief financial officer Samir Seksaria said
This comes as India's largest software exporter had a drop of 2,197 employees sequentially in Q3.
Report speculative, Board fully supports strategic direction, management team: Cognizant
“Awareness of workers' rights keeps increasing as we come across more judgments of similar nature. As this order involves one of the largest Indian IT companies, it will create an impact on the industry with respect to employment termination cases,” said Vikram Shroff, head, human resource laws (employment and labour) at Nishith Desai Associates.
The 58-year old executive said the company is "comfortable" with its business model and not perturbed by smaller rival Infosys adding more net business over the last few quarters despite being almost half in size.
Fintech firm PhonePe has raised another $100 million from existing backer General Atlantic and its affiliate funds at a $12-billion pre-money valuation. This is PhonePe’s fourth tranche of funding after it announced a separation of ownership from Flipkart last December.
Scoop: PharmEasy valuation halved to $2.8 billion, logs ebitda profitability; Paytm’s loan biz decoded
Online pharmacy PharmEasy recorded a positive ebitda of around Rs 14 crore, which means it is operationally profitable, even as one of its investors marked its valuation down to $2.8 billion. This and more in today’s ETtech Morning Dispatch.
TCS' rate of staff attrition, the percentage of those retiring or leaving for other reasons, rose to 17.4% in the quarter-ending March 2022 from 15.1% in the whole of 2021, as India's IT services sector experiences a tech talent crunch and high staff turnover.
Government-backed Open Network for Digital Commerce (ONDC) is set for rough weather ahead as the platform faces roadblocks while scaling. This and more in ETtech’s Morning Dispatch.
The market landscape and dynamics have changed in the past year amid the government’s investigations against electric two-wheeler manufacturers over subsidies claimed under government scheme FAME (Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India). This scheme was launched in 2011 as part of the National Mission on Electric Mobility.
Cognizant CEO Ravi Kumar on earnings, company’s vision & ChatGPT; Visa launches CVV-free online transactions
Ravi Kumar S, who took over as the chief of US-headquartered IT firm Cognizant four months ago, has termed the last quarter “historic” amid a cautious macro environment.
Most analysts expect the Indian IT sector to grow its revenue in mid- to high-single digits year on year in FY24, a steep climb down from the high growth registered in the past two years post the pandemic.
Wipro guided for a revenue drop between 1% and 3% in the April-June quarter, owing to a negative demand outlook. This is below estimates by brokerage houses such as Kotak, which had estimated Wipro to guide for revenue decline of 1% to growth of 1% for the period.
Wipro guided for a revenue drop between 1% and 3% in the April-June quarter, owing to a negative demand outlook.
This week, Terra’s creator Do Kwon was fined $78 million by tax authorities and faces an investigation in South Korea, another stablecoin lost its peg to the dollar, and regulators vowed to rein in the controversial assets.
The company, which is backed by SoftBank and Alpha Wave Global, joins a growing list of startups that have fired employees to conserve cash amid a slowdown in funding.
Fintechs struggle to come together for self-regulation; epharmacies, govt officials hold talks over new rules
India's new-age financial services industry has faced constant regulatory scrutiny in recent years disrupting businesses across the board. To streamline the workings, the country's central bank has asked the fintech industry to come up with a self-regulatory organisation. But that's not been easy to do. This and more in today’s ET Morning Dispatch.
The company's software and consulting businesses rose 6% and 8.2%, respectively, at constant currency in the first quarter, in line with IBM's targets. Big Blue also reiterated its full-year free cash flow forecast of $10.5 billion.
For the full year, the net hiring number stood at 29,219, down 46% from the 54,396 employees hired by the Bengaluru-headquartered firm for the full year in FY22.
Krishnan Ramanujam said it is as bad a judgment call for an employee to take steep salary hikes for no discernible reason as it is for an employer to offer the same.
The introduction of platforms like ChatGPT has led to concerns on whether a trained human is needed at all to deliver the work which a technology company offers to clients.
IT firms have been battling record attrition of late, so startups’ loss is their gain.
Hi Digbijay here in Bengaluru. Last month, I was in Mumbai and visited the offices of the newest ecommerce challenger in India –Tata Digital-- which runs the superapp Neu. If you’ve been reading our coverage of one of Tata’s most ambitious projects, you’ll know we’ve been on top of all the big developments, breaking the most important stories.
Earlier this week TikTok said it has more than 150 million monthly users (nearly half the population) in the US, up from 100 million just a year ago. However, the exponential growth of the short video platform comes at a time when it faces an existential crisis in the US as the Joe Biden administration seeks a ban or a potential sale of the platform to a local owner.
For a 1-year perspective, invest in largecaps such as the Nifty or a basket of stocks from the Nifty, while midcaps and smallcaps are better suited for a 3-5 year view, according to Nilesh Shah, CEO at Envision Capital. He believes that stocks bought during IPOs could become profitable in five years' time. While echoes of the 2008 financial crisis are being heard, he says history will not repeat itself. Rather, he sees a 2013-type scenario with a possible extended period of consolidation.
It has been a week of major turmoil for the technology industry with the sudden collapse of Silicon Valley Bank. But amid all the chaos of the last few days, the hype around generative AI continued.
Industry experts said the top players like Tata Consultancy Services (TCS), HCLTech, Infosys, and Wipro will be better positioned to tap this opportunity, as quite a few such deals fall under traditional outsourcing requirements.
Attrition has tapered from peak levels of 25-30% last year to about 20% in the December quarter and the consequent lag in salary hikes is likely to help companies improve operating margins, which have been under pressure due to the high cost of talent.
Exclusive | 2023 will be to repair margins which will improve but not by leaps and bounds: TCS CEO Rajesh Gopinathan
Attrition was also driven by this lack of supply. People were in a negative spiral of hiring from each other and driving attrition. As the supply side eases out, that kind of a (talent) demand goes off the table, said TCS CEO Rajesh Gopinath
TCS’s headcount stood at 613,974 for the quarter-ended December. It is to be noted that, in the second quarter, the employee addition came in at 9,840 in July—September period— its lowest net new addition in the last nine quarters.
I think every downturn is actually a boom for Indian software companies except some extraordinary events like 2008 when the banking sector went down very badly and that was a reasonably large sector for large Indian software companies like TCS, Infosys etc. But even during that year, I still remember Kris Gopalakrishnan was a CEO, we grew by 25% so that was not bad.
The ban on 94 quick-loan apps has caught the digital-lending industry in a quagmire. Even as senior executives continued their hectic discussions with government officials on Wednesday, fintechs are rushing to submit their shareholding pattern to the Centre.
Attrition rate over the past 12 months has dropped to 17-18% across the sector, say experts.
Companies in the automobile, cement, capital goods, fast moving consumer goods, and consumer discretionary sectors got some respite on the cost front as prices of several commodities and other inputs eased in the quarter.
Seven in 10 IT cos in India may increase their headcount in Q1 2023, says Randstad survey.
Following the release of the Reserve Bank of India’s (RBI’s) new digital lending rules, fintechs in India have been in continuous consultation over first loss default guarantee (FLDG) arrangements. Today we have new details of the conversations between the central bank and fintechs on this hot bottom issue. More details in the ETtech Morning Dispatch.
Traders can deploy long butterfly strategy ahead of Budget; keep an eye on metal stocks: Anand James
This time around, metal stocks have generally been on the positive side in the last month. So, there is a 60% chance that we are going to see a positive move post the Union Budget. The power sector has been witnessing profit booking since September, pulled down majorly by institutional activity. Institutions have been net sellers to the tune of Rs.1463 crore in the last four months.
The third quarter numbers provided the technology ecosystem with a sense of how enterprise clients were planning their budgets for the year and the commentary has remained murky on that front, too.
According to analysts, IT services exporters have showed gross profit margin expansion despite slower top line growth in the previous quarter, which is expected to continue. The weakness of the rupee against the dollar and slower attrition rates due to layoffs in global IT majors & Indian startups are the other tailwinds for the sector atthe fundamental level.
This week, news website Semafor reported that the software giant is in talks to invest $10 billion in OpenAI, the company behind the revolutionary new chatbot ChatGPT, in a deal worthy of Shank Tank’s hall of fame.
The company onboarded 3,000 freshers so far in Q3 against its FY23 fresher target of 30,000 candidates.
Flipkart’s online marketplace has received a cash infusion of about $90 million (Rs 722 crore) from its Singapore-based parent entity, regulatory filings showed. The news comes soon after the Walmart-owned firm parted ways with payments app PhonePe, which it acquired in 2016.
“Right now, we have visibility for double digit earnings growth but looking at the commentary that we are seeing in the last few days and weeks, certain sectors seem to be under pressure. If we deliver closer to 14-15% earnings growth for the broader markets, we will continue to see healthy outperformance. Otherwise, there will be a challenge.”
"If we get any rallies, it is probably worth selling into in our view because I do not think in the next one year, China can make up for the kind of recession that we are going to see in Europe, UK. It’s looking like a mild recession in the US at the moment. It is going to get worse before it gets better for the metal stocks, probably it is the second half of 2023 trade."
Exclusive: Dunzo likely to raise $100 million via convertible notes; data localisation norms hit roadblock
Over the past six months, convertible notes have emerged as a lifeline for many highly valued, growth-stage startups which were unsuccessful in raising funds through the traditional equity route. Today, we are reporting that Reliance-backed delivery startup Dunzo is likely to join the likes of B2B e-commerce company Udaan and epharmacy platform PharmEasy in tapping the convertible note route to shore up fresh funds. This and more in today’s packed edition of the ETtech Morning Dispatch.
Google, which is appealing a ruling and Rs 1,337 crore fine imposed by India’s competition watchdog in October for alleged abuse of its dominance in the mobile OS market, has now been asked to deposit 10% of this sum with the National Company Law Appellate Tribunal. The NCLAT has also refused to stay the fine, and will next hear Google’s appeal on February 13.
Antitrust regulators in Australia and Germany are among those following recent action by the Competition Commission of India against Google, signalling increased global attention on policy rulings in India.
The top Indian IT majors Tata Consultancy Services, Infosys, Wipro and HCL Tech had hired around 2.2 lakh employees during fiscal 2022 amid concentrated demand for digitisation triggered by the pandemic.
Indian IT services companies began 2022 faced with record demand and hiring, only to deal with moonlighting by employees. They are now staring at a somewhat uncertain 2023. Cyberattacks on critical infrastructure are expected to continue even as new digital initiatives like ONDC may be expanded. Team ET looks at what 2023 may hold – albeit with standard disclaimers - for the tech sector.
Last Sunday, Twitter announced new rules under which it would suspend accounts that posted links to other social media platforms such as Facebook and Instagram with the main purpose of promoting content on these platforms.
Unicommerce’s data is based on analysis of more than 500 million transactions. It does not include the data related to sales of mobile phones and smartphones.
India’s largest edtech firm has been facing turbulent times over the past six months, with questions being raised about the 18-month delay in announcing its audited results. In September, it finally released its audited FY21 results, showing losses to swell to Rs 4,588 crore after changes to its revenue recognition method.
IT cos headed for lower attrition in coming quarters as global macro woes tame high churn, say analysts
Overall, the Q2 scorecards of Tier 1 Indian tech companies have clear markers that supply side pressures are set to ease.
Years of crippling economic sanctions and pressure from governments in the neighbourhood (mainly China) have forced North Korea to come up with creative ways to bypass these economic punishments.
‘Systemically important’ platforms may face more scrutiny; angels investing in foreign startups meet forex hurdle
The parliamentary committee on finance will submit a report on digital markets in the winter session of Parliament that will propose mandatory disclosures by these platforms on a regular basis, they told us.
HDFC Securities is expecting a 242 basis points (bps) drop in the EBIT margins on a yearly basis for the larger IT players, whereas second rug IT counters may see a 1 per cent compression, taking the average hit on the entire sector to 228 bps.Management commentary by Indian IT Services players has been positive post 1QFY23, but the street will be looking beyond this, particularly the guidance for the future.
Startup funding uptick in Nov but investors stay chary; how logistics fleets are driving record EV sales
The growth in funding has mostly been led by early and growth stage rounds, which crossed $1 billion in November after more than five months, according to data from Venture Intelligence.
Among the sectoral funds, IT has been the worst affected this year. While infra and banking funds are up about 11% and 21% respectively, pharma funds are down about 6% so far.