The regulatory environment is moving at breakneck speed. In sectors like tech and finance, where governments are trying to stay ahead of technological advancements and emerging risks, the problem is especially pronounced.

AI is a prime example of how technology is shaping the regulatory landscape. In fact, a recent analyst study predicts that by 2028, 60% of governments worldwide will adopt a risk management approach in framing their AI and generative AI policies.

AI is just one facet of regulatory compliance that is driving change for today’s businesses. New and existing regulations impact many areas of commerce – employment, environmental, social, and governance (ESG) commitments, international and domestic trade, and financial operations, to name a few. Complicating matters further, regulations often vary across borders, trade blocs, and even languages. 

While regulation is imperative, it also creates huge compliance challenges that, if not properly managed, could have significant financial consequences for enterprises.

But there’s hope on the horizon. 

Impact Of Fast-Moving Regulations

To avoid negative financial consequences, business leaders must understand what’s at stake with non-compliance. Significant financial penalties, litigation, and reputational damage can erode revenue and threaten a company’s long-term stability and growth. 

For instance, the EU’s AI Act, a first-of-its-kind legislation, came into force across 27 member states in August. It emphasises monitoring the regulatory compliance of companies and their responsible use of AI. 

Failure to comply could result in fines at varying levels, depending on the severity of the violation and the company’s size. For example, non-compliance with high-risk AI systems could lead to fines of up to 7% of a company’s annual turnover or a maximum of 35 Mn EUR, whichever is greater.

Every relationship across the business ecosystem – whether with customers, partners or suppliers – represents a potential weak spot. But where there’s a business relationship, there’s also a contract and an opportunity to enforce regulatory standards. This makes contracts one of the most valuable resources in today’s environment, serving as the foundation for every great compliance strategy.

The ability to derive insights from contract data, gain visibility into potential risks, and drive contract performance is essential to ensure that regulations are met while protecting the bottom line. However, this is easier said than done, particularly when you have limited resources and time. 

AI Is Transforming Contracting

AI isn’t just the technology being regulated – interestingly, it’s also the tool that can help businesses comply with stringent and complex regulations globally. Beyond AI regulation, GenAI, in particular, can streamline compliance across various regulatory landscapes, reducing risk and enhancing efficiency. By integrating data across thousands of contracts, AI empowers decision-makers with visibility into business outcomes tied to revenue, savings, and risk. 

Whatever the regulation, AI-powered contracting solutions can extract obligations at scale to help businesses improve the transparency of their relationships and ensure that regulatory compliance clauses are fully realized and adhered to. And it does not stop there – with powerful GenAI-driven agentic frameworks that are evolving quickly, these solutions can also verify that those obligations are met in the normal course of business.

With critical information about business relationships at their fingertips, all leaders – from CFOs, and CPOs to general counsels – are better equipped to set their strategy in this rapidly shifting regulatory environment.

Automating Compliance

Implementing AI-driven solutions offers substantial benefits. With full visibility into contracts across the enterprise, teams can easily identify potential areas of non-compliance and continually monitor relationships to detect unauthorised terms and regulatory violations.

When new regulations are passed, business leaders can automatically pinpoint which business relationships are no longer compliant. For example, AI can assess risk during the negotiation process and ensure critical clauses are not overlooked when new contracts are signed.

AI can also suggest compliant language to optimise the contract, ultimately streamlining reviews while protecting the organisation. This enables legal teams to focus resources on negotiating high-risk agreements that require closer review, rather than touching every contract.

With agentic frameworks and more “thoughtful” large language models (LLMs) like OpenAI’s o1, it is now possible to analyse whether the transactions that result from these business relationships are compliant with the language and obligations in the contract. This adds tremendous value to the 70% value chain of the contract – the life of the contract beyond the negotiation and execution.

Compliance As A Driver Of Financial Stability

With AI as a partner in the regulatory arena, business leaders can focus on what matters most – saving money and driving revenue.

Contracts are the bedrock of business. But they can be a forgotten asset. AI in contracting ensures the full intent of every business relationship is realised in the real world, bringing potential cost- saving and revenue opportunities to the surface that might otherwise be overlooked.

Contract Intelligence finds value in agreements immediately and then enables continual performance across relationships well into the future, safeguarding your company’s financial health by preventing unwanted revenue leakage that eats away at cash flow and undermines the balance sheet.

Now that’s the sort of AI that everyone can get behind.

The post How AI-Powered Contracts Are Strengthening Financial Health In A Regulatory Shift appeared first on Inc42 Media.

Over four months after the launch of its JioFinance app in beta mode, Jio Financial services has added multiple new offerings and launched an upgraded version of the app. 

In a statement, the company said that it has added a wide array of financial products such as loan on mutual funds, home loans (including balance transfers), and loan against property since the launch of the beta mode. 

The company claimed that over 6 Mn users have “experienced” the JioFinance app so far and it incorporated the feedback received from these users to improve the app.

“With the refreshed JioFinance app, which is truly made in India, and with many more new new features coming soon, we are well on our way towards becoming a trusted financial companion for the people of India, helping them fulfill their aspirations with our comprehensive suite of financial products,” said Hitesh Sethia, managing director and CEO, of Jio Financial Services. 

The app is available on Google Play Store, Apple App Store, and MyJio. In its beta launch, the app integrated digital banking, UPI transactions, bill payments, and insurance advisory.

The company claimed that users can open a digital savings account with Jio Payments Bank Ltd (JPBL) in under 5 minutes via the app. It said that over 1.5 Mn customers currently use the app to manage their routine, recurring expenses using their JPBL account.

The JioFinance App also provides users with a consolidated view of their bank accounts and mutual fund holdings. It also offers 24 insurance plans, including life, health, two-wheeler, and motor insurance, the company said.

From digital lending, banking and insurance to broking and asset management, Jio Financial Services aims to disrupt the fintech sector in the country by leveraging technology and Jio’s wide customer base.

In August, Jio Financial Services marked its entry into the international market by expanding the capabilities of its JioFinance App. The app now enables Indian travellers to make payments at select tourist attractions in Paris, including ticket purchases for the Eiffel Tower and in-store shopping at Galeries Lafayette Paris Hausmann.

Earlier this month, Jio Financial Services and BlackRock received in-principle approval from the Securities and Exchange Board of India (SEBI) to establish a mutual fund business. 

The company has also signed joint venture agreements with BlackRock to set up wealth management and brokerage ventures.

On the financial front, Jio Financial Services reported a net profit of INR 313 Cr in Q1 FY25, a 5.7% decline from INR 332 Cr in Q1 FY24. Operating revenue rose slightly to INR 418 Cr from INR 414 Cr in the year-ago quarter. 

The post Jio Financial Services Expands JioFinance App With New Offerings appeared first on Inc42 Media.

Brokerage firm Bernstein expressed caution over the plans of insurtech major Policybazaar’s parent PB Fintech to venture into the healthcare sector. However, it has capped the downside at $100 Mn if the foray doesn’t go as expected. 

Last month, PB Fintech Group chairman and CEO Yashish Dahiya told CNBC-TV18 that the company is considering making a one-time investment of $100 Mn for a 30% stake in a new healthcare venture.

However, analysts at Bernstein said that the foray in the healthcare sector would be a sharp departure from the company’s current asset-light model to a more asset-heavy space, Moneycontrol reported. 

Shares of PB Fintech have been under pressure since it was reported that the company was considering venturing into the healthcare sector. On September 26, the stock plunged as much as 10.3% during the intraday trading session following reports about its healthcare foray.

The stock has ended in the red in 10 out of the last 12 trading sessions.

Despite the volatility, Bernstein maintained its ‘outperform’ rating, saying the healthcare foray could further strengthen PB Fintech’s position on the Indian health insurance map.

The brokerage has set a price target of INR 1,720 apiece, implying an upside potential of 4% from the stock’s previous close, as per the report.

In an interview last month, PB Fintech cofounder and CFO Alok Bansal addressed concerns around the company’s business model remaining asset-light. While the insurance aggregator is committed to improving healthcare experiences, it does not plan on buying physical assets like hospitals, Bansal reportedly said.

Taking comfort in this, brokerage Jefferies, earlier this month, reaffirmed its ‘buy’ call on PB Fintech at a price target of INR 1,800 apiece. This would imply an upside of about 9% from the stock’s last close.

PB Fintech posted a consolidated net profit of INR 59.98 Cr in the June quarter (Q1) of the financial year 2024-25 (FY25) as against a loss of INR 11.9 Cr in the year-ago quarter. The turnaround came largely on the back of robust growth across business segments.

Shares of PB Fintech were trading 0.7% lower at INR 1,642.65 on the BSE at 02:45 PM on Thursday.

The post Bernstein Cautions On PB Fintech’s Healthcare Foray, Caps Downside At $100 Mn appeared first on Inc42 Media.

Fintech unicorn CRED has appointed Arvind Kathpalia, the chief risk advisor of slice, as its new advisor on risk and compliance.

In a statement released to the press, CRED founder, Kunal Shah, said that Kathpalia’s experience in risk management and compliance will be instrumental for the company.

“I’m excited to learn from him as we advance towards that vision,” Shah said.

Notably, Kathpalia is already working with one of CRED’s rivals in the fintech space, slice. CRED’s appointment does not bar him from working with slice, people close to the development told Inc42. He joined the Rajan Bajaj-led unicorn (slice) in May this year to support its newly merged banking unit with North East Small Finance Bank. 

Before joining slice, Kathpalia served Kotak Group for over 25 years – starting in 2009. At Kotak, he was involved in identifying, assessing, mitigating and monitoring credit, market, operational and liquidity among other risks. He has also held various leadership roles at ANZ Grindlays and Standard Chartered Bank.

Founded in 2018 by Shah, CRED’s initially offered rewards and benefits to premium credit card users for paying their bills. However, it has been on the super app path for the last few years and has launched many new services to monetise its user base. 

Notably, the company’s operating revenue jumped about 71% to INR 2,397 Cr in the financial year 2023-2024 (FY24) from INR 1,400 Cr in FY23. 

However, the company’s net loss also increased in FY24, up 22% compared to last year. In FY23, the company reported a net loss of INR 1,347 Cr, which increased to INR 1,644 Cr in FY24. 

The fintech’s operating loss declined 41% to INR 609 Cr in FY24 from INR 1,024 Cr in the previous year.

The post CRED Hires slice’s Arvind Kathpalia As Risk Advisor appeared first on Inc42 Media.

The Reserve Bank of India (RBI) has decided to increase the transaction limit for UPI123Pay and UPI Lite to further increase UPI adoption.

Following the meeting of the RBI’s Monetary Policy Committee (MPC), the central bank said that the per transaction limit of UPI123 Pay will be increased to INR 10,000 from INR 5,000 currently.

Besides, the transaction cap for UPI Lite will be enhanced to INR 1,000 from INR 500 currently. To further increase its use, the central bank has also decided to increase the UPI Lite wallet limit to INR 5,000 from INR 2,000 currently.

The RBI said that the National Payments Corporation of India (NPCI) will issue the necessary instructions shortly to facilitate these changes.

Introduced in 2022, UPI123Pay is designed for feature phone users. It allows them to access UPI services without an internet connection in 12 languages. 

Similarly, UPI Lite was launched for small-value transactions, enabling users to make quick payments without needing a full internet connection.

This is the second revision in the transaction limit for UPI Lite over the last year or so. In August last year, the RBI increased the per transaction limit for UPI Lite to INR 500 from INR 200.

Meanwhile, the RBI also said like UPI and IMPS, it has been decided to introduce a ‘beneficiary account name look-up facility’ for RTGS and IMPS transactions to verify the name of the receiver (beneficiary) before initiating a payment transaction. 

“Remitters can input the account number and the branch IFSC code of the beneficiary, following which the name of the beneficiary will be displayed. This facility will increase customer confidence as it would reduce the possibility of wrong credits and frauds. Detailed guidelines will be issued separately,” the RBI said. 

The developments come at a time when UPI continues to grow by leaps and bounds. In September, the number of UPI transactions surged to 15.04 Bn from 14.96 Bn in the previous month.

Fintech giants PhonePe and GooglePay continue to dominate the UPI market with market share of 48.4% and 37.3%, respectively. 

The Indian government is also pitching UPI to the world. In July, PM Narendra Modi said that India plans to integrate UPI with Malaysia’s national payments network PayNet. In the same month, the NPCI rolled out the ‘UPI One World’ wallet for all foreign tourists in partnership with IDFC First Bank and Transcorp International Limited.

Not to mention, countries like Sri Lanka, Mauritius, Bhutan, Nepal, the UAE and Canada have already deployed India’s UPI payment model to some extent.

The post RBI Increases Transaction Limits For UPI123Pay, UPI Lite  appeared first on Inc42 Media.

Digital payments major PhonePe has announced a partnership with ICICI Bank to roll out credit-on-UPI for customers of the bank. 

In a statement, ICICI Bank said that the service will only be available for pre-approved customers on the PhonePe app. The new service will enable select customers to avail a credit line (for making UPI payments) of up to INR 2 Lakh with a repayment period of 45 days.

“This credit line is interoperable across various UPI payment applications and provides customers the facility of transacting using any UPI payment app,” added the bank. 

Commenting on the partnership, head of payments at PhonePe Deep Agrawal said, “… This partnership will enable customers to avail flexible short-term credit through a fully digital user experience from within the PhonePe app instantly. Credit line on UPI is yet another innovative product offering that will unlock and revolutionise access and use of credit in the country…”.

Chiming in, ICICI Bank’s head of payment solutions Niraj Tralshawala added, “…At the anvil of the festive season, the pre-approved customers of ICICI Bank can activate the credit line instantly to make payments for their festive shopping needs on PhonePe”.

The collaboration will enable the two companies to expand their offerings, tap into new customers, create additional streams of revenue with interest payments, and enable high-value purchases.

This follows PhonePe introducing credit line on UPI in August this year, which allows users to link their bank’s credit lines directly to UPI on the platform. This comes a year after the Reserve Bank of India (RBI) expanded the scope of UPI to include pre-approved credit lines. 

It is pertinent to note that the credit line on UPI utilises the existing UPI infrastructure for a seamless experience.

The development comes as UPI transactions recorded a modest month-on-month (MoM) increase of 0.53% in September 2024, rising to 1,504 Cr from 1,496 Cr in the previous month. On a year-on-year basis, the transaction count saw a significant surge of 42%.

According to data from the National Payments Corporation of India, the total UPI transactions processed in September amounted to INR 20.64 Lakh Cr, up from INR 20.61 Lakh Cr in August.

The post PhonePe Partners ICICI Bank To Offer Credit Line On UPI For Select Users appeared first on Inc42 Media.

Continuing on the path to recovery, shares of fintech major Paytm surged 15.65% to end Tuesday’s (October 8) trading session at INR 753.60. With this, the startup’s market capitalisation also jumped to $5.71 Bn. 

The upswing came a day after the startup’s founder and CEO Vijay Shekhar Sharma reiterated Paytm’s focus on doubling down on its core business of consumer payments. 

Speaking at a CII event in Kolkata on Monday, Sharma said that the company will look to reinvest in the consumer payments business area. “Payments remain our primary business, and the merchant side continues to be strong. However, we lost a significant consumer base due to regulatory constraints. Moving forward, we aim to reinvest in the consumer payments business area,” PTI quoted him as saying.

The comments came on the heels of Paytm selling its entertainment ticketing business to Zomato for INR 2,048 Cr in an all-cash deal.

On Monday, Paytm also announced allotting 93,284 equity shares to its employees under Employee Stock Option Scheme 2019 and Employee Stock Option Scheme 2008. 

It is pertinent to note that the shares of Paytm have been on an upswing for the past four weeks. Last week, the stock gained 3.39% to end the week at INR 695.20. 

Earlier this month, Paytm announced its plans to double down on the use of artificial intelligence (AI). As part of this, it appointed its payments CTO Manmeet Dhody as ‘AI Fellow’ to drive its projects related to AI innovation in business. It also elevated senior VP of Technology Deependra Singh Rathore as its new payments CTO. 

Despite the recent bull run, it is pertinent to note that the company’s shares are currently trading over 60% lower than its listing price of INR 1,950. Paytm went public in November 2021. 

Recently, Sharma also expressed regret on his choice of investment bankers for the company’s initial public offering (IPO). “I have been an entrepreneur long enough now. I have a regret of not choosing the correct bankers for the IPO,” Sharma said last month. 

The post Paytm Zooms Over 15% After Vijay Shekhar Sharma Reiterates Focus On Consumer Payments appeared first on Inc42 Media.

Neobanking startup Jupiter, which counts Tiger Global, Peak XV, QED Investors and Matrix Partners among its backers, is reportedly in discussions for a stake in SBM Bank India.

As per The Arc, the company is looking to acquire a 26% stake in the Mauritius-based SBM Group’s subsidiary. The deal, subject to the approval from the Reserve Bank of India (RBI), may materialise in tranches and include an option of raising the stake.

This comes days after a report emerged that Jupiter is in early talks to acquire a 5% to 9.9% stake in SBM Bank India.

Back then, the startup’s founder and chief executive officer Jitendra Gupta declined to answer Inc42 queries, saying he does not “comment on market rumours”.

“Discussions have been underway for several quarters. A broad agreement has been finalised and will be filed with the RBI in the coming days,” The Arc report quoted a source as saying.

Founded in 2019 by Gupta, Jupiter offers a range of financial services, including debit cards, SIPs, mutual funds, personalised savings options, expense management, and UPI payments.

In June, the neobanking business secured prepaid payments instrument licence from the RBI to provide digital wallets for UPI payments, fund transfers and bill payments, and Jupiter then disclosed its plans to introduce a prepaid account facility in the coming months.

The company has, so far, raised over $171 Mn in about six rounds of funding from various investors, including Tiger Global, Peak XV Partners, QED Investors and Matrix Partners. The company last raised $2.4 Mn in June, as per Inc42 data. 

The post Neobanking Startup Jupiter Seeks RBI Approval For Stake In SBM Bank India appeared first on Inc42 Media.

Following the settlement of a two-year long legal dispute between BharatPe and Ashneer Grover, the fintech startup’s former managing director, his wife Madhuri Jain, among others, have moved the Delhi High Court seeking quashing of an FIR filed with Delhi Police’s Economic Offences Wing (EOW) in the case.

The petitioners said that since the parties reached a settlement on September 30, the FIR should be quashed. They sought some time to file the affidavit regarding the compliance of the terms of the settlement agreement, following which the HC asked them to file it within two days.

The court also asked BharatPe’s director to file an authorisation letter issued to him on behalf of the fintech company within two days. 

Earlier, sources close to BharatPe told Inc42 that the startup would not object if the Grovers appealed to a court to quash the FIR.

The case dates back to January 2023, when BharatPe filed a civil suit against Grover and his family members for alleged embezzlement of funds. The fintech unicorn also sought up to INR 88.67 Cr in damages.

Following this, the Delhi Police EOW registered an FIR against Grover, his wife, and other family members alleging a fraud of INR 81 Cr.

As part of its investigation into the matter, Delhi Police arrested Grover’s brother-in-law Deepak Gupta, who was accused of instructing the vendor Amit Kumar Bansal, last month.

However, by the end of September, the fintech giant settled the case with Grover, stating that the ex-cofounder will not be associated with BharatPe in any capacity nor be a part of the shareholding of the company.

“Certain shares of Mr Grover shall be transferred to the Resilient Growth Trust for the benefit of the company and his remaining shares will be managed by his family trust,” BharatPe said in a statement.

The post Ashneer Grover Seeks Quashing Of EOW FIR After Settlement With BharatPe appeared first on Inc42 Media.

Listed fintech SaaS startup Zaggle has bolstered its board with an appointment as it aims to drive growth in the fintech space.

The company has roped in Kotak Mahindra Bank’s consumer banking head Virat Sunil Diwanji as an additional director to its board. 

In his new role, Diwanji, who has over two decades of experience with Kotak Bank, will help in fuelling Zaggle’s innovation and customer engagement, the startup said in a statement. 

“I look forward to working closely with Zaggle’s leadership team to drive the next phase of growth and create sustainable value for all stakeholders,” Diwanji said. 

Zaggle’s founder and executive chairman Raj Narayanam said, “Diwanji’s vast experience in banking and leadership will complement Zaggle’s Indian and global expansion efforts. His insights will be instrumental as we continue to strengthen our position in the retail and commercial segments, and we believe his expertise will help guide us through the rapidly evolving fintech landscape.”

Diwanji has over 30 years of experience in building, managing and growing businesses cutting across liabilities and assets.

Prior to joining Kotak Group, he was managing director at Ford Credit (financial service arm of Ford Motor) for more than two years. Before that, he has worked with the management consultancy division at A. F. Ferguson & Co for six years. 

Last week, Zaggle allocated 44,161 additional stock options under its Employee Stock Option Plan (ESOP) 2022.

Founded in 2011 by Narayanam, Zaggle offers spend management solutions for businesses as well as other SaaS tools such as expenses, payments, and rewards management software. 

Last month, the startup picked up stakes in two companies – Span Across IT Solutions and Mobileware Technologies. While it acquired a 26% stake in Mobileware Technologies for INR 15.6 Cr, it also received board nod to pick up 98.32% shareholding in Span Across IT Solutions for nearly INR 32 Cr.

The post Zaggle Boosts Board With Kotak Veteran Virat Diwanji appeared first on Inc42 Media.

Months after cryptocurrency exchange WazirX suffered major security breach, resulting in withdrawals of around $234 Mn, government agencies have started investigation into the heist, seeking information on the illegal transfer of crypto tokens from its wallets.

As per Moneycontrol, over the past few weeks, officials from government agencies such as the Financial Intelligence Unit (FIU), Intelligence Bureau (IB), and the Indian Computer Emergency Response Team (CERT-In) are interrogating WazirX executives in connection with the crypto hack.

However, as per the report, the company’s probe has also not found any evidence of foul play into the case.

For the uninitiated, the FIU maintains records of all crypto exchanges and entities operating in the Indian market. While IB is primarily responsible for counterintelligence, and gathering intelligence apart from other duties to bolster national security.

Also, the CERT-In is an office under the Ministry of Electronics and Information Technology (MeitY), dealing with cyber security incidents.

A team of eight to ten officials from the agencies questioned WazirX executives at its Mumbai office to figure out the $234 Mn hack, the report added, quoting sources close to the matter.

WazirX reportedly has provided details on server and laptop logs, transaction trails, and the blockchain addresses linked to the hacking.

This development comes days after the crypto exchange company announced to form a committee of creditors (CoC) by October 9, which will include 10 members comprising users affected by the massive hack, to give WazirX advise and feedback on its restructuring plan, it said in a blog post.

The company, which initially filed for a moratorium, was recently granted a four-month period from the Singapore courts, providing no room for any legal action against WazirX during this time.

“The government is concerned about the size of the illegal transfer in WazirX as it impacts retail investors. The government agencies have reached out for some data to understand the structure, how the transfers happen and liquidity, etc. The hack happened because there are grey areas as the sector is unregulated,” the report quoted another source as saying.

The post Govt Agencies Start Probe Into WazirX’s $234 Mn Crypto Hack appeared first on Inc42 Media.

One often gets asked: where are the profitable startups? Three recent examples come to mind, all coincidentally in the same segment and from Bengaluru. We are talking about Zerodha, Groww and Dhan.

In fact, the ‘success rate’ in investment tech for profitability is rather high compared to other segments in the broader fintech sector — even Upstox reached profitability in FY23. And this is perhaps why many fear that SEBI’s changes this year might disrupt this profitability in some measure.

This past week, Zerodha revealed that SEBI’s new derivatives framework will definitely have an impact on futures and options (F&O) volumes. For SEBI, these rules are critical to protect investors from becoming too enthralled by the F&O frenzy, but will the changes set Zerodha, Groww, Dhan, Angel One and other discount brokers back in terms of profitability as many fear?

Let’s try to answer that after a look at these top stories from our newsroom this week:

• End Of BharatPe-Ashneer Grover Saga? After two years of bad blood, mudslinging and court battles, BharatPe and Ashneer Grover have come to a settlement, but its timing has raised quite a few questions. Was it a settlement or a compromise?
• The Valuation Game: Prominent investors are now saying that the age of high valuations and unicorns is over for the Indian startup ecosystem and now the focus is shifting to value over valuation. What explains this shift?
• The Festive Season Battle: Quick commerce has the edge when it comes to online grocery, but are the likes of Blinkit, Zepto and others close to disrupting Amazon India, Flipkart and Meesho’s festive season expectations? Here’s a breakdown

Regulatory Hit For Zerodha, Groww & Co

Since July this year, discount brokers and investment tech platforms have had quite a few things to worry about, with more major changes on the way

It started when SEBI decided to bar market infrastructure institutions from offering discounts based on trading volumes of members, effectively hitting the business model of discount broking platforms such as Zerodha, Groww, Upstox, among others. The move was largely seen as a way to curb the F&O trading frenzy.

The second setback came via the Union Budget, which hiked capital gains tax and securities transaction tax. Common sense dictates that retail investors are more likely to think twice about how much they now want to invest.

The most recent disruption has come from SEBI’s new derivatives framework, which will come into effect from November. These changes include weekly expiry of only one index derivative per exchange, upfront collection of option premiums from buyers, increasing the minimum contract size for index derivatives to INR 15 Lakh, among others.

Together, these changes have made it slightly more difficult for platforms to predict investor and trader activity, made it more complicated for them to bring in new users and have forced them to look at other revenue streams to make up for any potential dip in profits.

Zerodha, Groww and other investment tech platforms that have scaled up massively on the back of the F&O boom of the past 18 months will feel the heat.

Into The F&O Frenzy

As per SEBI data as of May 2024, equity derivatives and F&O volumes on BSE and NSE saw a whopping 71% YoY growth to INR 9,504 Lakh Cr.

Further, according to data by global trade monitor FIA, more than 36.8 Bn equity index options were traded on these two exchanges between April and June 2024. This is 100% YoY growth and represents two-thirds of all F&O trades on every exchange around the world. In other words, India is quite mad about F&O.

This growth has coincided with investors flocking to discount broking platforms. Groww now boasts over 11 Mn active investors as of May 2024, with Zerodha trailing at 7.8 Mn as of August 2024. However, these leading platforms see the impact from SEBI’s new rules differently.

For instance, in the past week, Zerodha CEO Kamath said that the platform will not change its zero brokerage model in structure even as most industry observers expected the opposite. And then a few days later, Zerodha put on a brave face in the light of yet another potential complication with SEBI’s new derivatives framework, saying it would affect 30% of its futures and options (F&O) orders.

To put this in context, Zerodha reported INR 8,320 Cr or about $1 Bn in revenue for FY24. This is undoubtedly a major milestone for the company, but now other industry observers believe revenue for the current year (FY25) will drop by 30%-50% for Zerodha.

Groww on the other hand has distanced itself from F&O as a category. In the past, the company has said that its growth and revenue generation is not heavily dependent on F&O trading. In a recent interaction at a media conference, cofounder and CEO Lalit Keshre also said that Groww has a different outlook on investment tech.

“Groww is not an F&O company, but a financial services company. Hardly 15% of our customers do trading. Trading is a zero-sum game. Investing is a win-win game. We encourage responsible trading,” Keshre was quoted as saying.

Kamath also claimed that the real impact of SEBI’s changes in the F&O framework will only become clear after November this year when the rules come into effect. And that could be a big blow to the profitability streak for Groww, Zerodha and others.

Speaking of profits, as we reported this week, Groww is likely to see a 4X YoY jump in its net profit to INR 297.8 Cr in FY24. Among startups, Groww is the closest to Zerodha, which had a sizable lead over the former with INR 4,700 Cr ($562 Mn) in profit for FY24. This is despite Groww having significantly more active investors.

As for the other profitable players, Angel One, the discount broking arm of full service firm Angel Broking, reported a net profit of INR 1,126 Cr, while Dhan finished FY24 with a healthy profit of INR 177 Cr after just about three years of operations.

Dhan expects the gross revenue impact from SEBI’s changes to be around the 25%-30% mark, according to a report by The Arc, which would certainly eat into those profits.

Diversification Is The Game

It’s no surprise then that most players are looking to diversify their revenue streams. The most clear example is of Groww, which has seen its lending business grow steadily in the past year.

The Bengaluru-based unicorn has also added UPI payments and an asset management company to make the most of its lead in terms of active investors.

Groww’s NBFC arm Groww Creditserv’s loan book stood at INR 965.44 Cr as on June 30, 2024, growing 32% from INR 731.1 Cr in the previous quarter. Personal loans accounted for 98% of the total loan book, and consumer durable loans accounted for the rest. However, Groww Creditserv is not yet a profitable entity. It posted a loss of INR 24.1 Cr in FY24, almost 10X higher than its loss in FY23.

Some such as Upstox are leveraging scale to launch insurance distribution, but this is not exactly a high margin play.

Then there’s margin trade funding or MTF – where brokers lend money to traders to earn interest income while keeping the financed shares as collateral. This is usually an area where banks have had a strong presence. However, Groww has made an entry into this space and Zerodha is also contemplating a launch, as per sources.

Among discount brokers, Mirae Asset-backed Mstock has cracked the MTF formula to some extent and has built a loan book of around INR 2,000 Cr, as per ET, while Angel One also has a significant interest in MTF.

Industry insiders believe that MTF can be a lucrative vertical for discount brokers because the primary target audience is high-net-worth individuals, which naturally have larger propensity to invest. It could be a way for Groww, Zerodha and others to nullify the revenue impact from SEBI’s strict new framework for F&O.

Despite the upside, making the most of these new verticals will be a distraction for Zerodha, Groww, and others, who have become used to consistent revenue generation and profitability.

But it’s also an opportunity for Groww to turn the tables on Zerodha in terms of revenue, or for other players to emerge as strong rivals. As always, India’s regulators have added a fresh new twist to the fintech game.

Sunday Roundup: Tech Stocks, Startup Funding & More

• After a drought of almost two years, the Indian startup ecosystem is showing signs of recovery, with startup funding growing by 2X YoY to $3.4 Bn in Q3 2024
• VC giant Peak XV Partners has pared the size of its $2.85 Bn fund by 16% or $465 Mn, and restructured the carried interest and management fees for its LPs across various stages
• Ahmedabad-based coworking space provider DevX is looking to tap the IPO boom and has filed its DRHP for a fresh-issue-only public offering

• Bullish about its IPO, Swiggy will now look to raise a total of $1.4 Bn through the public issue, up from previously planned $1.25 Bn, after getting the shareholder nod for the increase
• Ola Electric slipped below the INR 100 mark in the week, as concerns of profitability and drop in EV market share linger on the stock

The post Zerodha, Groww’s Revenue Conundrum appeared first on Inc42 Media.

Update | October 5, 09:58 PM: This story has been updated to include comments from sources close to the company.

Sources at WazirX have rejected the report which said that the troubled crypto exchange took down a YouTube video in which its management claimed to share 100% profits from any crypto price appreciation during its restructuring process with the users in the future. 

The sources close to the company told Inc42 that the crypto exchange did not take down any such video. They said that the initial link pertained to the live town hall broadcast. Later, the company uploaded the entire YouTube video with a new URL, they claimed. 

Earlier, The Crypto Times claimed that WazirX took down a YouTube video where the company management claimed that it would share 100% profits from any crypto price appreciation in future with users. 

The comments came during an hour-long town hall session on October 4, which saw WazirX cofounder Nischal Shetty and George Gwee, director of Kroll, the legal entity managing the crypto exchange’s restructuring after $234 Mn heist, answering questions from affected users. 

During the Q&A session, a user raised a question over what will be the sharing percentage of profits if crypto prices appreciate during the restructuring process. To this, Gwee said that 100% of profits from crypto price appreciation during WazirX’s restructuring would be shared with users. 

However, as per The Crypto Times, the video was made private by WazirX right after users “praised” Shetty for the move. 

The development came hours after WazirX announced plans to form a Committee of Creditors (CoC) by October 9, as the exchange works to restructure its liabilities following a $234 Mn hack that left its Indian users with significant losses. 

The 10-member panel, consisting of users affected by the hack, will provide advice and feedback on WazirX’s restructuring plan, according to a blog post by the company.

In July, one of WazirX’s multisig wallets witnessed a major breach, resulting in the loss of over $230 Mn in digital assets, accounting for more than 45% of the exchange’s

In the aftermath, cofounder Nischal Shetty tried to deflect responsibility for the breach on wallet provider Liminal, a claim that Liminal refuted last month. Afterwards, the company also announced a bounty hunter programme to gather clues on the whereabouts of the missing cryptos. 

Eventually, the crypto exchange filed an application before the SIngapore High Court, in August, seeking moratorium as the move would give it the necessary “breathing space” to facilitate restructuring of liabilities. Last month, the HC granted the cryptocurrency exchange a four-month moratorium. 

The post [Update] WazirX Video Deleted? Sources Say URL Changed, Video Not Taken Down appeared first on Inc42 Media.

Doubling down on its artificial intelligence (AI) play, fintech major Paytm said it has appointed its CTO Manmeet Dhody as “AI Fellow” to drive its projects related to AI innovation in business. 

Dhody has been with the company since 2020, joining as CTO-Payments. His over two decade long prior work experience has seen him lead software development for over seven years for ecommerce major Amazon between 2012-2020, serve as the principal development lead for Microsoft, and hold the position of director in US-based software development company Quark. 

Meanwhile, Paytm has elevated senior VP of Technology Deependra Singh Rathore as its new CTO-Payments. Interestingly, Rathore helmed AI-led strategic initiatives and oversaw design and implementation of payment products and services during his ongoing eight-year tenure with the company. 

He joined the company as a senior VP for its associate Paytm Payments Bank in 2016. Before joining Paytm, he worked as an engineering manager for Snapdeal for over a year between 2014-16. Prior to that, he worked for AGNITY and GENBAND. 

Paytm credits him for building its payments technology to provide exhaustive payment solutions to merchants and customers such as online payment gateway, QR payments, card payments.

“As India’s leading tech innovator, we have always championed innovations that drive mobile payments and inclusive financial service distribution to masses. We are excited to see Deependra Singh Rathore step into the role of CTO, and build for financial services in the AI age. We also welcome Manmeet as an AI Fellow, helping accelerate our vision of integrating AI-driven processes across our business operations,” a Paytm spokesperson said. 

This comes about a month after Paytm chief Vijay Shekhar Sharma said that the company is “fully committed” to integrating AI in its core payment business. 

“Some technologies being built are so good, if you fork it out, it could become a standalone business vertical. Risk management options, credit risk, fraud risk, future underwriting of insurance will all be led by AI. The generative AI interaction with financial services will be underwriting,” Sharma said during the company’s 24th annual general meeting on September 12. 

However, it is pertinent to note that the company has also attributed its mass layoff spree to AI adoption. Earlier, sources told Inc42 that Paytm has been adopting AI wherever possible to drive up efficiency since last year, resulting in layoffs. The company has laid off hundreds of employees since 2023.

“For the coming year, while we continue to invest in the merchant sales team, as well as risk and compliance functions, we expect reductions in other employee costs. We expect annualised people cost savings of INR 400 – INR 500 Cr,” Paytm said in its annual report for FY24. 

The post Paytm Fortifies Its AI Play, Appoints Payments CTO Manmeet Dhody As AI Fellow appeared first on Inc42 Media.

Jio Financial Services and BlackRock have received in-principle approval from the Securities and Exchange Board of India (SEBI) to set up their proposed mutual fund business.

“… Securities and Exchange Board of India (SEBI) vide letter dated October 3, 2024 has granted in-principle approval to the Company and BlackRock Financial Management Inc to act as co-sponsors and set up the proposed mutual fund,” Jio Financial Services said in a filing with the BSE.

The financial services company said that the final approval for registration from SEBI will be contingent upon certain requirements to be fulfilled by it and BlackRock. 

This comes more than a year after Jio Financial Services said that it signed a joint venture (JV) agreement with BlackRock to foray into the Indian asset management space. At the time, it said that Jio Financial Services and BlackRock would target an initial investment of $150 Mn each in the JV, where both entities will own 50% stake each in the newly formed digital-first company. 

Thereafter, in October last year, Jio Financial Services filed an application with SEBI for a mutual fund licence. 

It is pertinent to note that SEBI approves mutual applications in two steps. First, the applicants get in-principle approval, enabling them to set up an asset management company, which is followed a few months later by final nod.

In April this year, Jio Financial Services also signed another JV with BlackRock to set up wealth management and brokerage ventures. At the time, the financial services company said that the move would enable it to offer digital-first products and “democratise” access to investment solutions.

With this, Jio Financial Services-BlackRock has become the latest entity to receive SEBI approval for its mutual fund foray. In the past one year, the regulator has issued licences to the likes of Zerodha, Old Bridge Capital Management, Helios Capital, among others, for offering mutual funds. 

The approval comes at a time when India’s mutual fund ecosystem continues to see healthy growth. As a result of this, new players like Zerodha and Groww have launched multiple mutual funds in the past one year.

The post Jio Financial Services, BlackRock Get In-Principle Nod From SEBI For Mutual Fund Biz appeared first on Inc42 Media.

Update | October 12, 08:20 PM: The headline and the article have been edited to clearly explain the impact of sale of Navi Finserv’s former subsidiary Chaitanya India Fin Credit Private Limited.

Flipkart cofounder Sachin Bansal-led fintech startup Navi Technologies’ subsidiary Navi Finserv’s consolidated operating revenue stood at INR 1,906.2 Cr in the financial year 2023-24 (FY24) as against INR 2,040.6 Cr in FY23. 

However, the numbers are not comparable as the FY23 numbers also included income from Navi Finserv’s former subsidiary Chaitanya India Fin Credit Private Limited. The startup divested its entire stake in the subsidiary during FY24. 

Excluding the revenue of Chaitanya India in FY23, Navi Finserv’s operating revenue rose about 48% from INR 1,283 Cr. 

Meanwhile, following the sale of the subsidiary, the consolidated profit after tax (PAT) from continued operations slipped 56% year-on-year (YoY) to INR 115.6 Cr in FY24. 

The profit from discontinued operations stood at INR 429.5 Cr.

Including the profit of Chaitanya, the startup’s total consolidated net profit also more than doubled to INR 545.1 Cr in FY24 from INR 264.2 Cr in the previous year.

In August 2023, Ananya Birla-led Svatantra Microfin Pvt Ltd signed a definitive agreement to acquire Chaitanya for INR 1,479 Cr and completed the acquisition in November 2023. 

Earlier, Bansal acquired Chaitanya Rural Intermediation Development Services (CRIDS) via BAC Acquisitions (now Navi Technologies) in 2019. CRIDS was later rebranded as Chaitanya India Fin Credit. The acquisition helped Navi acquire an NBFC licence. However, the Reserve Bank of India (RBI) rejected Chaitanya India Fin Credit’s application for an ‘on tap’ universal banking licence in 2022.

Navi Finserv was incorporated in 2012 and provides various kinds of loans, including personal, vehicle, and home loans. A majority of its revenue comes from interest income on loans, investments, and deposits with banks.

On a standalone basis, the startup’s total interest income grew nearly 36% to INR 1,611.1 Cr from INR 1,180.8 Cr in FY23. Its net gain on derecognition of financial instruments under amortised cost category almost doubled to INR 102.4 Cr during the year under review from INR 51.7 Cr in the previous year.

Navi Finserv’s total asset under management (AUM) stood at INR 8,527.2 Cr in FY24 growing from INR 6,791 Cr at the end of FY23. The startup also had total loan disbursements worth INR 16,006 Cr in FY24 as against INR 12,630 Cr the year before.

Zooming Into Expenses

Though not comparable, Navi Finserv’s total expenses saw a marginal increase to INR 1,750.4 Cr in the reported year from INR 1,743.9 Cr in FY23, with finance cost alone comprising over 37% of its total spending.

Finance Cost: The startup’s finance cost declined about 5% to INR 657.7 Cr in FY24 from INR 691.6 Cr in the year before.

Employee Cost: Navi Finsev cut its employee benefit expenses by a massive 42% to INR 149.9 Cr in FY24 from INR 257.9 Cr in the year before.

It spent INR 120.3 Cr on salaries, wages and bonuses in the year under review as against INR 217.1 Cr the previous year.

The decline could be attributed to the sale of Chaitanya. On a standalone basis, expenses under this bucket increased 77% YoY to INR 149.9 Cr in FY24.

Loans Written Off: The company’s spending on loan write-offs jumped to INR 406.2 Cr in FY24 from INR 125.4 Cr in the year before on a consolidated basis.

On a standalone basis, the loans written off saw a bigger jump of 275% YoY.

Overall, its impairment on financial instruments stood at INR 495.6 Cr in FY24.

“Our AUM growth scaled up in the last two quarters of FY23 leading to passover of P&L impact in FY 24. At the overall level, our credit costs for FY24 is at 6.7% of average quarterly AUM as compared to 7% of average quarterly AUM for FY23. Provision coverage ratio for FY24 stands at about 88% vis-a-vis about 83% for FY23,” said Navi Finserv in a statement. 

Software Support Charges: Navi Finserv’s spending under this head grew over 50% YoY to INR 248.2 Cr in FY24.

Navi Finserv converted into a public entity in March 2022. Its holding company Navi Technologies got SEBI’s nod for IPO but didn’t go ahead with public listing plans.

In July this year, Navi Finserv did a final close of a $38 Mn personal loans securitisation deal with JP Morgan. 

Earlier this year, the company also raised INR 150 Cr via bond issuance from several investors, including Dadachanji Group chairman Kairus Shavak Dadachanji, Pervin Kairus Dadachanji, and Rishad Kairus Dadachanji. 

The post Navi Finserv Posts INR 1,906 Cr Revenue In FY24 After Sale Of NBFC Subsidiary appeared first on Inc42 Media.

Listed fintech SaaS startup Zaggle has allocated 44,161 additional stock options under its Employee Stock Option Plan (ESOP) 2022.

In an exchange filing, the Mumbai-based startup on Friday (October 4) said it has received approval from its board to grant the additional stock options to eligible employees.

“This is to inform you that the… compensation committee in its meeting held on Friday, October 04, 2024 has inter-alia approved granting of 44,161… options to eligible employees of the company under the Zaggle ESOP 2022,” the company said. 

Based on the stock’s closing price on Friday, the total value of the new stock options translated to INR 2.03 Cr.

The company has set the exercise price at INR 335 per stock option.

In the filing, the company said that each stock option will be convertible into “one fully paid up equity share” with a face value of INR 1 each and can be exercised within 10 years from the first date of vesting of options, barring certain exceptions. 

Founded in 2011 by Raj Narayanam, Zaggle offers spend management solutions for businesses as well as other SaaS tools such as expenses, payments, and rewards management software. 

Zaggle has expanded its ESOP pool a week after it picked up stakes in two companies – Span Across IT Solutions and Mobileware Technologies. While it acquired a 26% stake in Mobileware Technologies for INR 15.6 Cr, it also received board nod to pick up 98.32% shareholding in Span Across IT Solutions for nearly INR 32 Cr.

The fintech SaaS startup saw its consolidated profit after tax (PAT) jump 716% to INR 16.73 Cr in the first quarter (Q1) of the fiscal year 2024-25 (FY25) from INR 2.05 Cr in the year-ago period. Meanwhile, revenue from operations zoomed 113% to INR 252.2 Cr in the quarter under review from INR 118.4 Cr in Q1 FY24. 

Shares of Zaggle closed the day 3.14% higher at INR 460.25 on the BSE on Friday.

The post Zaggle Expands ESOP Pool With 44.1K Stock Options appeared first on Inc42 Media.

Cryptocurrency exchange CoinSwitch has launched crypto futures trading on its PRO platform, which will offer a versatile trading experience for selected users, allowing them to maximise their trading potential with leverage of up to 25X.

With this new feature, users can trade in over 350 contracts, including BTC, ETH, SOL, MATIC, and XRP. 

CoinSwitch Futures will enable users to take long (buy) or short (sell) positions on perpetual futures contracts and will also allow them to hedge their spot holdings. The platform aims to stand out with its competitive commission rates, offering users some of the lowest fees in the market. Additionally, new users will benefit from a 100% commission rebate for the first 15 days.

“By offering leveraged futures contracts, we aim to cater to the needs of sophisticated traders seeking to capitalise on price movements in the dynamic crypto market,” said Balaji Srihari, business head, CoinSwitch.

Users can access futures trading on mobile and desktop by signing up or logging into their existing CoinSwitch PRO accounts.

Founded in 2017 by Ashish Singhal, Govind Soni, and Vimal Sagar Tiwari, CoinSwitch is a crypto trading platform that aims to simplify and enhance the trading experience for over 2 crore Indians through its app and CoinSwitch PRO.

Last month, the company introduced specialised crypto investment services for High Net-Worth Individuals (HNIs) and institutional investors, aiming to provide secure and customised solutions. In September 2021, CoinSwitch entered the unicorn club with a $1.9 Bn valuation.

The development comes months after CoinSwitch announced plans to take legal action against WazirX to recover 2% of its trapped funds. In a blog post on August 28, CoinSwitch stated it held INR 12.4 Cr and INR 28.7 Cr in ERC20 tokens, and INR 39.9 Cr in other tokens on WazirX.

Meanwhile, in April the founders of the crypto currency platform launched stock investment platform Lemonn under the umbrella brand PeepalCo. Lemonn is the second independent company under PeepalCo after CoinSwitch. 

At the time, Inc42 also reported that CoinSwitch founders were aiming to launch an investment platform in the next quarter. 

The post In Trading Push, CoinSwitch Unveils Crypto Futures With Over 350 Contracts appeared first on Inc42 Media.

Zerodha cofounder and CEO Nithin Kamath expects trades on the online broking platform to decline by as much as 30% on account of the Securities and Exchange Board of India’s (SEBI) new derivatives framework. 

In a post on X on Thursday (October 3), Kamath said that the regulator’s new directives, such as one weekly expiry of index derivative per exchange and rise in contract sizes, will also likely impact nearly 60% of “overall” futures and options (F&O) trades.

“Here’s the potential impact of only one weekly expiry of index derivatives per exchange and contract sizes going up by around 2.5 times. As things stand, assuming that those trading weekly don’t move on to trading monthly, the impact will be ~60% of overall F&O trades and ~30% of our overall orders,” said Kamath. 

This comes a couple of days after the market regulator introduced a slew of new measures to crack the whip on the overheated Indian F&O market. 

The new mandates include upfront collection of option premiums from buyers, limiting weekly expiry derivatives to just one benchmark index per exchange, increasing the minimum contract size for index derivatives to INR 15 Lakh, among others. 

The new rules will come into effect from November 20. 

Meanwhile, the BSE will discontinue weekly index derivatives contracts for Sensex and Bankex from November 14 and November 18, respectively. 

Despite his projections, Kamath expects things to become “much clearer” post the November 20 deadline, when the new rules will come into effect. He added that Zerodha will then revisit its pricing structure on the basis of the impact of the new norms on the company’s bottom line. 

“I guess things will become much clearer from November 20th. We will then decide on our change in pricing structure, based on the impact on the business,” read Kamath’s post on X.

The comments echo the larger concerns among industry watchers. The six-pronged framework has been envisaged to crack the whip on derivatives markets and deter retail investors from engaging in F&O trading. As per reports, trading volumes in India’s F&O segment could tank by as much as half once the new norms kick in. 

The SEBI crackdown comes at a time when market experts have flagged the F&O market as an avenue for losing money rather than “a newfound path to quick riches”. A SEBI report said that 93% of traders in the F&O segment lose money, and added that these traders keep returning to the market to make a quick buck despite burning their money before. 

Such has been the clamour that SEBI chairperson Madhabi Puri Buch, earlier this year, said that the market regulator was open to taking “some derivative products” off the market as the country was in the middle of a period of excess options trading. 

Subsequently, in July this year, the regulator floated a consultation paper seeking stakeholder feedback on seven recommendations to overhaul the index derivatives framework, with an eye on increasing investor protection and market stability. 

Two months later, the regulator finally drafted six recommendations to rein in the overheated derivatives market in India and curb the F&O mania. 

Earlier this week, SEBI’s uniform fee structure also came into effect, which, as per credit agency ICRA, is expected to weigh heavily over the profitability of online broking players such as Groww, Zerodha, Upstox. 

The post SEBI’s New Derivatives Framework To Hit Zerodha Trades By Nearly 30%: CEO Nithin Kamath appeared first on Inc42 Media.

Tata Sons’ chairman emeritus Ratan Tata has partially exited broking platform Upstox with 10X returns after the startup concluded a buyback of 5% of Tata’s stake in it.

Without disclosing the specifics of the transaction, Upstox, in a statement, said that Tata has registered a “23,000% return on the original investment” made in 2016, based on the startup’s last valuation of $3.5 Bn. 

Tata acquired a 1.33% stake in Upstox when he invested in the startup in 2016.

It is pertinent to mention that Tata has been a prominent investor in Indian startups. Besides Upstox, he counts the likes of Ola, CarDekho, Lenskart, among others, in his portfolio. 

After Tata’s investment, Upstox raised $50 Mn in two more funding rounds from Tiger Global in 2019 and 2021. 

Commenting on the development, Upstox cofounder Kavitha Subramanian said, “We believe that everyone deserves the opportunity to grow their wealth, not just the privileged few. Our mission is to deliver strong returns for all our investors, and we’re proud to say that today we’re able to return part of Mr. Tata’s investment.” 

Upstox’s parent company RKSV Securities was founded by Shrini Viswanath, Raghu Kumar, and Ravi Kumar in 2008. It started off as a proprietary trading firm but subsequently  ventured into retail brokerage with the launch of the Upstox platform in 2012. It currently claims to have a customer base of over 1 Cr Indians. 

Earlier this year, Upstox said it turned profitable in the financial year 2022-23 (FY23). The startup posted a consolidated profit of INR 25 Cr in FY23. Operating revenue jumped 44% to cross the INR 1,000 Cr mark from INR 765.6 Cr in FY22.

In May, Upstox also entered the insurance distribution business. It now offers term, motor, health and personal accident insurance through its platform. 

Upstox competes with the likes of Groww and Zerodha in the country’s burgeoning invest tech space. Both of its aforementioned rivals recently reported their financial numbers for FY24. 

While Groww’s operating revenue jumped 123% year-on-year (YoY) to INR 2,899 Cr, Zerodha clocked a revenue of INR 8,320 Cr during the year under review. While Groww reported a 4X YoY jump in its net profit to INR 297.8 Cr in FY24, Zerodha’s profit zoomed 61% to INR 4,700 Cr.

Upstox is yet to report its financial numbers for the last fiscal year.

The post Ratan Tata Partially Exits Upstox With 10X Returns appeared first on Inc42 Media.

Fintech startup RING (erstwhile Kissht) has elevated its data and analytics head Neha Shivran to the position of cofounder as well as chief data and growth officer.

Shivran took to her LinkedIn post to make the announcement. “I’m happy to share that I’m starting a new position as cofounder and chief  data and growth officer at Kissht!” she said.

Shivran joined the company as the head of data science in 2019. Prior to this, she served as the director of risk and analytics at Singapore-based fintech company LenddoEFL. Besides, she also worked as an associate vice president at TransUnion CIBIL Limited.

Founded by Krishnan Vishwanathan and Ranvir Singh in 2015, RING enables credit for consumers to make purchases at digital points of sale (both online and offline). Its plug and play gateway APIs are integrated into any merchant checkout page or retail point of sale to provide quick loans.

The company also leverages machine learning and artificial intelligence to evaluate customer’s credit worthiness, calculate credit score and offer pre approved loans.

This appointment comes months after RING raised a debt funding of INR 100 Cr (about $12 Mn) from venture financing platform Trifecta Capital, to expand its loan book.

However, this is not the first time that Trifecta Capital is placing its bets on RING.

Back in 2022, the VC firm co-led an INR 100 Cr funding round along with Northern Arc in the company. This round was intended to help RING in expanding its scale of operations, enhancing its product offerings including credit cards for small businesses/shops and to leverage AI and ML in its operations.

Later that year, the startup also raised $80 Mn in a funding round led by Vertex Growth and Brunei Investment Agency to enter the buy now, pay later (BNPL) card segment. At that time, the startup was valued at $500 Mn.

Today, the company claims to have assets under management (AUM) of INR 3,000 Cr and served 1 Cr borrowers in FY24.

The post Trifecta-Backed RING Elevates Neha Shivran To Cofounder appeared first on Inc42 Media.

WazirX has announced that it will form a committee of creditors (CoC) by October 9 as the cryptocurrency exchange rushes to restructure its liabilities after suffering a massive $234 Mn hack that left millions of Indians with substantial losses.

The 10-member creditors’ committee, which will comprise users affected by the hack, will give WazirX advise and feedback on its restructuring plan, it said in a blog post.

The development comes days after a Singapore court granted WazirX a four-month conditional moratorium to restructure its liabilities. In a recent town hall, the exchange’s legal advisors said that WazirX customers are likely to get back only 55-57% of their funds even after the restructuring.

“The COC aims to be representative of the broader Creditor base in selection criteria, and COC members represent the interests of all Creditors (not just their own),” WazirX said.

The hacked crypto exchange added that the CoC will focus on creating restructuring terms acceptable to other creditors. However, its role will be completely consultative. While it will have the same voting rights as other creditors on matters of restructuring, WazirX is not obligated to accept their recommendations.

To set up the CoC, WazirX said it will distribute creditors by count and value of their claims against the exchange to ensure adequate representation.

“The company will first establish a “Contingent Creditor Pool” by segmenting creditors into tranches of 10% each based upon the total value of claims (each a “tranche”) – creditors will be sorted in terms of smallest claims to largest claims, with this overall list being broken into 10 separate tranches each representing 10% of claims, with the sum of all tranches amounting to USD 546.5 Mn of claims,” WazirX said in a statement.

“Within each tranche, 1% of creditors will be selected at random to establish the Contingent Creditor Pool (~43k Creditors out of ~4.3m Creditors in total), allowing every creditor an equal chance of selection by count within their tranche, which has already been adjusted by value to mitigate impact from the significant numbers of creditors with low Claims,” it added.

Affected users will be chosen at random to be part of the contingent creditor pool. They can either volunteer to be part of the CoC or reject their selection.

In July, WazirX suffered a massive attack on one of its multisig wallets that resulted in loss of digital assets worth over $230 Mn. These stolen funds represent more than 45% of WazirX’s total reserves. The exchange has since initiated a restructuring process to address its liabilities.

WazirX founder Nischal Shetty has blamed various parties for the security breach during this period while denying any responsibility. First, he pointed finger at custody wallet platform Liminal for security lapses, which Liminal denied last month. 

In August, Shetty tried to shift the blame on Binance, alleging that the exchange held a majority of Zettai Labs’ funds. Zettai Labs is the parent company of WazirX. Binance has since rejected any claims of wrongdoing and accused Shetty of ‘falsely implicating’ it in the $230 Mn hack.

The post WazirX To Set Up Committee Of Creditors After $234 Mn Hack appeared first on Inc42 Media.

Rohan Malhotra, cofounder and managing partner at early-stage venture investment firm Good Capital, passed away yesterday (October 1).

Known for his sharp investment acumen and deep commitment to nurturing startups, Malhotra cofounded Good Capital with his brother Arjun Malhotra in 2019.

The seed-stage VC firm quickly established itself by investing in transformative businesses, focused on software that enables agent-led distribution models and supports entrepreneurs who approach problem-solving through first-principles thinking.

His academic credentials, including an M.A. in Business Management from the University of St. Andrews and a YSS in Economics from Yale University, laid the foundation for his distinguished career, positioning him as a leading figure in the startup and investment world.

Malhotra’s journey in the business world began as an intern at HSBC. His talent and vision later led him to serve as an advisor at AngelList India, where he played a pivotal role in supporting the startup ecosystem. Before venturing into venture capital, he cofounded Investopad, a startup incubator aimed at fostering entrepreneurial growth.

Under Rohan Malhotra’s leadership, Good Capital launched its maiden fund with a target corpus of $25 Mn that backed startups from pre-seed to Series A stages.

Further, his vision also played a crucial role in the firm’s expansion, as it announced its second fund with a target corpus of $50 Mn, along with a $25 Mn greenshoe option. This fund aimed to support founders leveraging AI in distribution, personalisation, or business operations, with plans to write up to $1.5 Mn cheques over the next four years. Through this, the firm was aiming to invest in around 30-35 startups.

Good Capital’s investment portfolio includes startups like Meesho, simsim (acquired by Google), Definitive Intelligence (acquired by Groq) and Autonomic (acquired by Ford).

Tributes have poured in from the startup ecosystem, including Zishaan Hayath and Rahul Chaudhary.

“Shattering to think of a world without you, Rohan. In your short well-lived life, you filled us with warmth, laughter, ambition and hugs. They made only one like you,” Zishaan Hayath, cofounder of edtech startup Toppr said.

“Feeling broken. The kindest, the most generous, the most open hearted one ever created.
Rest in peace, Rohan,” Rahul Chaudhary, cofounder of Treebo, said.

“Rohan was more than a friend, he was my little brother, my golf partner and an irreplaceable human being. Memories you have given us in a short time are forever. Life can be very unfair at times,” Waqar Younis, former Pakistan Cricket Team coach wrote on X.

The post Startup Ecosystem Mourns The Loss Of Good Capital Cofounder Rohan Malhotra appeared first on Inc42 Media.

Groww Invest Tech, which operates online stock broking giant Groww, reported a 4X year-on-year (YoY) jump in its net profit to INR 297.8 Cr in the fiscal ended March 2024 (FY24), as per information shared with credit rating agency ICRA.

In contrast, the company clocked a profit after tax (PAT) of INR 73.1 Cr in the the financial year 2022-23 (FY23). 

As per an ICRA report, Groww Invest Tech, formerly Nextbillion Technology Private Ltd, also saw its operating revenue jump 123% to INR 2,899 Cr in the fiscal under review from INR 1,294 Cr in the year ago period. 

The credit agency attributed the surge in revenues to the continued growth in the unicorn’s client base and rising broking volumes. Citing NSE data, the report noted that Groww ranked first in terms of NSE active clients as of August 2024, with a nearly 25% market share.

It also said that despite the company’s recent foray into the margin trading facility (MTF) business, which “will lead to higher dependence on borrowings”, the financial leverage is expected to remain comfortable.

“The company reported a return on net worth (RoNW) of 40.3% in FY24, despite paying sizeable fees for the software, server and technology services availed from the parent,” added ICRA.

It is pertinent to note that Groww Invest Tech is a subsidiary of Billionbrains Garage Ventures, which also operates entities such as Neobillion Fintech, Groww Asset Management, Groww Pay Services, Groww Insurance Broking, Billionblock Finserv, among others in India.

However, ICRA said that the fintech unicorn was “susceptible to intense competition, regulatory changes and/or technological risks”. It also added that the Securities and Exchange Board of India’s (SEBI) recent mandates on uniform fee structure for market infrastructure institutions (MIIs) will likely impact the profitability of the overall broking industry, particularly discount brokers such as Groww. 

“Nonetheless, it is noted that GIT’s profitability at the standalone level remains constrained by the elevated cost-to-income ratio. A sizeable portion of the operating expenses is on account of the software, server and technology services availed from BGV,” added the report. 

Founded in 2017 by Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, Groww is an online discount broking platform that allows users to invest in stocks, exchange-traded funds (ETFs), and IPOs.

Backed by the likes of Peak XV Partners, Tiger Global and Propel Venture Partners, the fintech unicorn has raised more than $393 Mn in funding to date. 

The development comes close on the heels of Groww shifting its domicile back to India in March this year. As part of this, the company merged its US-based holding company, Groww Inc, with its Indian parent entity, Billionbrains Garage Ventures. 

Groww’s parent Billionbrains Garage reported a net profit of INR 448.7 Cr in FY23 compared to a net loss of INR 239 Cr in the previous fiscal. Meanwhile, operating revenue more than tripled to INR 1,277.8 Cr in the fiscal ended March 2023 as against INR 351 Cr in FY22. 

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