We bring to you the latest edition of News Roundup: Indian Startup Stories Of The Week!
In one of the major developments in the Indian startup ecosystem, the Indian Prime Minister’s Office has asked the policy think tank NITI Aayog to assess the decline in credit options of green energy firms. Banks are wary of lending money to clean energy projects as they are unsure of the viability of projects which are selling power at such low tariffs.
Further, India’s proposed personal data protection bill (DPB) has found opposition from yet other quarters, this time from the foreign portfolio investors (FPI) dealing in securities traded in the Bombay Stock Exchange. They have recently expressed their displeasure in the new bill as it requires them to keep a copy of financially sensitive ownership-related data, including the details of ultimate beneficiaries and their offshore banking accounts locally.
Here’s a look at the other important Indian startup news stories of the week!
Important Indian Startup News Stories Of The Week
Is Ola Profitable?
Speculations are in the air that the fact the Ola is planning for an initial public offering (IPO), it must have turned profitable in FY19. This is because Indian stock exchanges require companies to be profitable for at least three years before they go public. Also, it is believed that Ola is not looking to list via SME/startup focused listing programmes such as Emerge ITP etc, but rather a direct listing on BSE or NSE.
From The Government Corridors
- Guruprasad Mohapatra, secretary at the Department for Promotion of Industry and Internal Trade of India (DPIIT) said that there are 50,000 registered startups in India, and there will be 50K more by 2024 at this pace.
- Union Minister of Road Transport and Highways and Ministry of Micro, Small and Medium Enterprises Nitin Gadkari urged MSMEs to register themselves with the National Stock Exchange, which would help them gain easy access to capital.
- The consumer affairs ministry is looking to update the draft ecommerce guidelines it had released last month. With the addition of services such as video streaming, online ticket booking, and ride-hailing.under the ambit of ecommerce guidelines, the guidelines will reportedly be shared again by the first week of October. According to the media report, discussions over the broad contours of the policy were on, but the final document will be out only after other technology policies are mandated. The reason stated for the same was that the commerce ministry was trying to avoid overlaps and contradictions.
- US secretary of commerce Wilbur Ross said that India needs to bring in more balance in its ecommerce policy and consider the timing of the changes in regulations.
- Government think tank NITI Aayog’s CEO Amitabh Kant said that the government is pushing for public sector disinvestment and asset monetisation in a radical way. He also mentioned how the government is working to ensure that startups are never starved for funding in India.
- MeitY is looking to push the finance ministry to approve the additional incentives that are meant to attract more electronics manufacturers into the country. This would reportedly include interest subsidy on loans, credit guarantees for plant and machinery and renewal of the electronic manufacturing cluster (EMC) scheme after the earlier one ended last year.
- Railway Minister Piyush Goyal is planning to bring 6.5K railway stations online through WiFi connections. The ministry has also expressed its intention to install CCTV cameras at the stations.
From The World Of Ecommerce
The deep discounting issue prevails in the ecommerce sector. The Jodhpur Bench of Rajasthan High Court has issued notices to Amazon and Flipkart. The writ petition was filed by CAIT alleging continuous and repeated violations of the FDI policy by Amazon and Flipkart for years. CAIT also accused ecommerce website for causing losses to the Indian government by levying GST on the discounted price rather than the actual price of the product.
The traders’ body further emphasised on the repeated FDI violations by them alleging that these companies are engaging in deep discounting, predatory pricing, loss funding and controlling the inventory. However, multiple online sellers have said that these ecommerce companies have refrained from offering deep discounts during the festive season sales.
The Amazon Buzz
Amazon’s investment in India reduced this year, and it barely even crossed one-third of the investment it had made in the country last year. According to a media report, Amazon India only invested INR 2,800 Cr this year, compared to INR 9,450 Cr in 2018. However, the company has continued with its expansion spree and is now looking to venture into the market with its first cloud kitchen in Bengaluru.
From The World Of Fintech
- Peer-to-peer (P2P) lending industry body has now turned to the Finance Minister Nirmala Sitharaman to air their grievances regarding the Reserve Bank of India (RBI) norms, which limit the lending to INR 10 Lakh per customer. The platforms have been seeking relaxation in the guidelines ever since its implementation in 2018
- The data shows that UPI transactions in September were 955.02 Mn, a mere 4% growth in comparison to 918.35 Mn transactions in August. In terms of the value of transactions, UPI recorded INR 1,61,456.56 Cr in September, a 4.5% growth against INR 1,54,504.89 Cr worth transactions in August.
- PhonePe has been asked by the National Payments Corporation of India (NPCI) to add another banking partner for its Unified Payments Service (UPI) model. NPCI had reportedly spoken to its internal committees about making it mandatory for any third party payment provider with more than 5% market share to have more than one banking partner.
- The Reserve Bank of India (RBI) has made it mandatory for non-bank issuers of prepaid payments instruments (PPIs) and digital wallet startups to institute an internal ombudsman. It has directed, as part of its statement on developmental and regulatory policies issued on October 4, the large non-bank PPI issuers and wallet players to have an internal ombudsman scheme to strengthen the grievance redressal process of these payment entities.
Whatsapp Woes Continue
The vulnerabilities of Facebook-owned Whatsapp are out once again, but this time through something as simple as a GIF. A cybersecurity researcher has pointed out that hackers can gain access into the device through malicious GIFs due to a “double-free” bug.
Further, the researchers have noted that WhatsApp was extensively abused to spread unfounded rumours and create disinformation campaigns during recent elections in Brazil and India. The research emphasised that the closed nature of the app, in addition to the ease of transferring multimedia and sharing information to big groups make WhatsApp unique among other platforms.
WEF Forum Updates
The ongoing World Economic Forum’s annual India Economic Summit in Delhi saw many corporate leaders expressing their views on how corporate cut alone would not be enough to revive the economy. Further, according to an opinion poll by the World Economic Forum (WEF), people from India are among the world’s most optimistic about technology. The opinion poll was prepared and commissioned by SAP and Qualtrics in conjunction with this year’s India Economic Summit.
IRCTC IPO Oversubscribed
Indian Railway Catering and Tourism Corporation Ltd (IRCTC) has made a sparkling debut on the public markets. The shares have been oversubscribed 111.85 times. While portions allocated for qualified institutional buyers were oversubscribed 108.79 times, retail investors 14.65 times and employees 5.79 times, the IPO was most in-demand among non-institutional investors who oversubscribed it 354.52 times. The IPO, whose price band had been fixed at INR 315-320 per share, closed on October 3. The issue comprised an offer for sale of 2,01,60,000 shares and is part of the government’s divestment process in public sector undertakings.
Other Indian Startup Stories Of The Week
India Asks For Most Number Of Take Downs
A UK-based technology research firm Comparitech, in a report published on October 1, revealed that the government tried to control online content. The “which government censors online data the most” report points out that social media platforms and global technology companies such as Facebook, Twitter, Google and Microsoft have received 77,620 takedown content requests from India from July 2009 to July 2018. Out of these, 20% requests from the Indian government, amounting to over 15K requests across platforms.
What The Major Companies Are Upto?
- Paytm Mall and Amazon are investing in the hybrid online-offline play to support the anticipated sales hike in the festive season. According to a consulting firm RedSeer, the industry Gross Merchandise Volume (GMV) for the festive days in 2018 had jumped 77% year-on-year, in comparison to the overall annual growth at around 35%.
- SoftBank-backed Grofers has decided to start getting more offline stores on board as vendors. The company’s founder Saurabh Kumar plans to get 50K offline stores onboard in the next 30-36 months.
- Zomato has recorded a 225% rise in revenue in the first half of FY2020. According to the company’s biannual report, it has registered $205 Mn in revenue, compared to $63 Mn in the first half of last year.
- Spotify has brought its much-anticipated premium family plan to Indian users. The family plan lets six users enjoy and share unlimited music and podcasts for INR 179 per month.
- Uber has restructured its corporate holdings and brought its India business, including food delivery, under Uber India Systems. It is to be noted that earlier rides and food delivery businesses were a part of Uber BV, a private limited liability company registered in the Netherlands.
Allow Startup IPOs Even Without Profitability
Speaking at the India Economic Summit 2019, Sequoia Capital India’s Shailendra Singh said that many Indian tech unicorns are at a very big disadvantage because the Indian public markets are designed to reward only profit-making companies. To this, DPIIT secretary Guruprasad Mohapatra said that the IPO issue has not been put forward to the government in this manner before. “Once it is proposed, I am sure that it can be taken care of,” he added.
Ayushman Bharat Counts On Partners Like Ola, Google
Pradhan Mantri Jan Arogya Yojana (PMJAY), popularly known as the Ayushman Bharat has completed one year since its launch in 2018. At the celebratory event held today on September 30, the national insurance scheme was reported to have verified 10.3 Cr. beneficiaries and created around 50K jobs in hospitals. To deploy the schemes, various states have taken innovative ways which were made possible through various public-private partnerships including Uber, Ola, Google, Common Service Centres, civil society organisations and more.
Capex For 5G Roll Out Can Be Reduced
Indian telecom operators such as Airtel, Jio and Vodafone will collectively have to invest around $30.5 Bn for the 5G rollout in the country, according to a media report which cited the analysis of a Swiss investment bank UBS. “The need for a dense site footprint and fibre backhaul in 5G will likely shift the balance of power towards larger and integrated operators with strong balance sheets,” UBS said.
Tech Unicorns Come Together To Fight Online Fraud
MakeMyTrip, OYO, Paytm, Swiggy, Zomato, and Uber together met the Reserve Bank of India (RBI) representatives and made a joint representation on the issue of online fraud. The presentation also addressed the plan on how to curb these online frauds, which are reportedly engineered via fake toll-free numbers and serial bank account generators.
Bengaluru May Get Relief From Its Traffic Woes
The Bengaluru police department, which is all set to roll out AI-based traffic signals at most city junctions. The initiative is expected to tackle the traffic issue, which is currently one of the biggest problems faced by Bengaluru citizens.
OYO Suffers Privacy Breach
Budget lodging chain OYO comes under the ambit of privacy breaches due to a flaw in its security system. According to a cybersecurity researcher, the company’s customer data, which included booking IDs, phone numbers, the number of people in a room and the location of the hotel, was public.
Stay tuned for the next week edition of News Roundup: Indian Startup News Stories Of The week!