Also in the letter:
■ Wipro’s $1 billion AI play will be self-financed: Delaporte
■ MCA summons likely for directors of Byju’s parent
■ SoftBank offloads 2% in Paytm, holding falls below 10%
From coding to chips: HCL Group planning $300 mn semicon foray
HCL Group, which began life decades ago as a maker of computer hardware and peripherals before establishing its software credentials globally, plans an ambitious foray into India’s fast-evolving semiconductor ecosystem, several officials and industry executives aware of the development told ET.
Details: The HCL Group is close to submitting a proposal to the centre to set up an assembly, testing, marking, and packaging (ATMP) unit for semiconductors, they added. The project may cost in the range of $200-$300 million.
Also read | Foxconn, Vedanta pull the plug on semiconductor JV
Verbatim: “They (HCL) plan to submit a proposal. But they will need to strike a partnership with a firm whose chips will be packaged at their unit,” a senior government official said, adding that the company would have to submit a business model to the government to receive incentives under the India Semiconductor Mission. Another official confirmed that talks are ongoing between the company and the government over the proposal.
Also read | Foxconn pings other large business houses as Vedanta chip JV stalls
Group-level initiative: The semiconductor foray is being driven by the HCL Group and not directly by HCLTech, which is the $12.6-billion IT exports arm of the group. HCL will be applying for sops under the $10-billion semiconductor incentive programme. ET had reported in November that HCL is looking at purchasing stake in one of the semiconductor wafer fab applicants, ISMC Analog.
Also read | Chipping in: When, where and how
Manufacturing legacy: Over the years, the Noida-based company has had partnerships with brands such as Apple, Nokia, and Microsoft, among others, and was credited with bringing them to the country. It ceded ground in computer electronics manufacturing to Chinese companies, which offered products at lower costs. The group gradually wound down its hardware arm to focus on software services.
After gaming company founders, investors to raise concerns with govt on GST
Large investors in India’s online gaming sector are concerned with the GST Council’s decision to levy a 28% tax on the full face value of the bets for real money online games. They are planning to write to the government to voice their grievances. This comes after 130 stakeholders appealed to the government to reconsider the tax rate.
Driving the news: These investors are likely to caution the government that this steep tax could make the industry unviable, while disproportionately hurting small startups, a source told ET. Previously, they had demanded that GST be levied on the gross gaming revenue, which is the platform fee the companies collect for facilitating the games, and not on the full face value, or the contest entry amount.
Quote, unquote: “Investors wish to put forth the point in no unclear terms that the move will make the gaming industry unviable … this was conveyed to the finance ministry previously as well,” a person, who did not wish to be identified, said. “There are 400 million online gamers in the country and the imposition of GST on the contest entry amount could make the segment unattractive for users and investors.”
Big game: Investors like Tiger Global, Alpha Wave Global, DST Global, TPG, Matrix Partners India, and Steadview Capital hold stake in startups like Dream11, Games 24×7, Mobile Premier League (MPL), and Zupee. The Indian gaming sector has raised $2.8 billion from domestic and global investors in the past five years, according to data from Invest India, the national investment promotion agency.
Catch up quick: ET had reported on Monday that founders and senior executives of real money gaming companies from across India would be in New Delhi this week to meet top government officials, as they feel the 28% GST would severely damage the industry.
Wipro’s $1 billion AI play will be self-financed: CEO Thierry Delaporte
IT major Wipro had announced a $1 billion investment into artificial intelligence, in line with its peers that are rushing to make the most of the burgeoning technology. In a chat with ETtech, CEO Thierry Delaporte has said that these funds will come from within the company. He also talked about the company’s earnings report from the previous week and macroeconomic indicators. Edited excerpts:
On AI investment: The $1 billion will be invested over three years. (It is) to enhance our capabilities, solutions, platforms, assets, and offerings around AI for our clients and for ourselves. About 25% of the investments may be in acquisitions. The money will come from all the productivity gains we are focusing on.
On the revenue guidance: Yes, we have shown a decline in revenue. The range of 3% (-2% fall to +1% growth) also shows the level of uncertainty. It could actually go one way or another. It’s just not a growth market right now. Let’s face it.
On large deals: Large deals are driven by cost optimisation and simplification of systems. Clients are also consolidating their operations, and reducing the number of suppliers.
On the declining BFSI sector: The BFSI sector has been investing a lot in technology. The decline is an adjustment of the unusual surge we saw in the last (few) years. It will go back (up) rapidly.
MCA summons likely for directors of Byju’s parent
Days after the Ministry of Corporate Affairs (MCA) ordered a probe into beleaguered edtech firm Byju’s K3 Education, we now learn that the directors of its parent firm Think & Learn Pvt. Ltd. are likely to receive summons from the ministry over alleged corporate governance issues, sources told ET.
Detailed probe: A senior government official told ET that the MCA believes the recent developments at the edtech, including the resignation of its auditor Deloitte Haskins along with three of its board members, and delays in filing its financial statements, warrant a detailed probe into the startup’s governance.
Fraud charge? Once an officer from the ministry submits the report, the MCA will decide whether an investigation needs to be conducted by the Serious Fraud Investigation Office.
SoftBank offloads 2% in Paytm, holding falls below 10%
SoftBank CEO Masayoshi Son and Paytm CEO Vijay Shekhar Sharma
SoftBank confirmed in a BSE filing that it has reduced its stake in Paytm’s parent. “SVF India Holdings (Cayman) Limited has disposed of an aggregate of 12,771,434 equity shares of One 97 Communications Limited in a series of disposals undertaken between May 9, 2023 and July 13, 2023,” the filing stated.
Steady reduction: In May, SoftBank had sold a 2.07% stake in Paytm through open market transactions that began in February. Prior to the latest transaction, SoftBank held around 11% in the Noida-headquartered fintech firm. ET had reported earlier that SoftBank was planning to gradually sell its holdings in Paytm as it intends to exit the company completely.
SoftBank’s other India exits: SoftBank has been selling holdings in its India portfolio. It recently sold a part of its stake in Lenskart during a $600 million funding round , and is estimated to have made $90-100 million from the deal. It has also held talks with investors to dilute its holding in FirstCry, which is gearing up for an IPO. In March, it raked in around $130 million by liquidating shares in the logistics firm Delhivery.
No deal: Shark Tank India season 1 sees 41% deal completion
(L-R) Shark Tank India Season 1 investors: Ashneer Grover, Anupam Mittal, Namita Thapar, Vineeta Singh, Ghazal Alagh, Aman Gupta and Peyush Bansal.
Over a year after the first season of reality TV series Shark Tank India aired, the seven investors-cum-judges, termed sharks on the show, have completed only 27 of the 65 soft commitments they made to participating startups.
Details: A report by PrivateCircle Research, a private market intelligence firm, shows that the sharks committed to invest a total of Rs 40 crore in 65 companies during season 1. Of this, a total of Rs 17 crore has been invested across 27 startups till July 12, 2023.
‘Delay tactics’: The report comes amid allegations by some contestants that the investors had resorted to delaying tactics when it came to actually coughing up the cash. Shaadi.com founder Anupam Mittal had defended his fellow sharks and said that deal completion can take anywhere between three and nine months.
Other Top Stories By Our Reporters
Infosys signs five-year AI deal worth $2 bn: This comes a few days ahead of its first quarter results scheduled to be announced on Thursday. Earlier, Infosys had pegged its FY23-24 growth at 4-7%, its slowest revenue expansion in six years.
Large companies may corner big chunk of ONDC: Bernstein | Companies with a significant user base may have a natural advantage and end up cornering a large share of the business on ONDC (Open Network for Digital Commerce), the government-backed e-commerce marketplace, research firm Bernstein said in a report released on Tuesday.
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