Tata Group lines up another Rs 3,462 crore for digital biz; Google wants loan apps to display partner banks

By Daisy On Sep 21, 2022

A relatively late entrant in the competitive ecommerce segment dominated by Flipkart and Amazon, Tata Sons has been infusing internal capital in Tata Digital to take on the biggies. The latest investment of Rs 3,462 crore comes ahead of the crucial festive season, as the Tata Group seeks to increase its presence in the ecommerce space.

Also in this letter:
■ Loan apps on Play Store must display link to partner bank
■ WinZo opposes self-regulatory structure for online gaming
■ No plan to exit India or merge, says top Uber executive

Tata Group to pump in another Rs 3,462 crore in Tata Digital

Tata Group’s ecommerce flagship Tata Digital is increasing its authorised share capital from Rs 15,000 crore to Rs 20,000 crore, according to a regulatory filing last week, setting the stage for fresh capital infusion by its parent Tata Sons.

By the numbers: Tata Digital has already taken board approval in the past month to receive an investment of Rs 3,462 crore in tranches from Tata Sons. This will take the issued share capital of Tata Digital to Rs 15,934 crore, leaving the company the headway to obtain additional equity infusion of around Rs 4,000 crore.

What for? In its filing with the Registrar of Companies (RoC) on September 14, Tata Digital said the company was raising the money to repay existing debt and make investments in other ‘bodies corporate’, apart from business activities and other general corporate requirements.

This is the second time in this calendar year where the Tatas are increasing the authorised share capital of Tata Digital. In March, Tata Digital had increased it from Rs 11,000 crore to Rs 15,000 crore.

Loan apps on Google Play Store must display link to partner bank or NBFC

Loan disbursal apps and credit aggregators on the Google Play Store in India must prominently display a link to the partner bank or non-banking finance company (NBFC).

Driving the news: Google introduced this as an additional security feature after a series of meetings with officials from the Ministry of Electronics and Information Technology (MeitY) and the Reserve Bank of India (RBI) over the last few weeks.

Google updated the policy on September 5. Apps that have failed to comply – the deadline was September 19 – will be deleted from the Play Store.

Crackdown: The government has been trying to tackle the menace of digital lending apps that defraud customers with the lure of instant credit. It has also been putting pressure on the ecosystem – including platforms such as Google, which distribute a majority of these apps – to do more to weed out fake apps.

The IT ministry, in consultation with the RBI and the finance ministry, is also working on exhaustive guidelines that will detail the legal conditions that loan disbursal apps and loan facilitator platforms must adhere to while operating in India, a senior ministry official said.

WinZo opposes self-regulatory structure for online gaming

E-gaming startup WinZo has opposed the idea of joining a self-regulatory organisation (SRO) for e-gaming firms, two sources briefed on the matter told us. The development comes amid efforts by the government to draft rules for online gaming companies.

Driving the news: WinZo had written to the Minister of State for Electronics and IT Rajeev Chandrashekhar in June, expressing its views on the self-regulatory structure, the sources said. Other gaming firms have also had internal differences on the matter and there is a consensus that one SRO might not be enough for the sector, they added.

The founders added that enforcing governance by SROs in the digital gaming industry was not possible “ due to a well-documented history of an inability to achieve the desired outcomes in other sectors such as financial securities.…”

WinZo identifies itself as a real-money gaming platform that is skill-based and not chance-based. Its founder Saumya Singh Rathore told us the company was opposed to an SRO structure.

The platform hosts about 100 skill-based, third-party games, including fantasy cricket, football, chess, carrom, racing and others. Its main contention is the outsized influence certain gaming companies in the sector would have over the SRO.

WinZo takes Google to court: WinZo has also sought an injunction against Google’s decision to allow daily fantasy sports (DFS) and rummy games in a pilot project on its Play Store. In a lawsuit filed in the Delhi High Court on Monday, WinZo said it had contacted Google on September 10 to contest the updated policy, saying it was “unfair”.

No plan to exit India or merge, says top Uber executive

Uber is neither selling its business in India nor is in talks to merge its operations with another mobility solutions company here, Andrew MacDonald, head of global mobility and business operations at Uber, told us.

In his words: “We have had no talks about exiting India,” he told ET in an exclusive interview. “For us (India) is one of our most important markets globally.”

Uber’s reaffirmation of its commitment to India comes amid reports that the US cab-hailing multinational could be looking at the possibility of merger with local players such as Ola amid flailing business growth.

MacDonald manages the $62-billion tech company’s mobility segments like cab-hailing globally and is counted among the handful of top executives at Uber reporting to its chief Dara Khosrowshahi.

He said Uber has made incredible progress in India not only “from a growth perspective but also from a perspective of getting to sustainable unit economics”. “We think we’ve built a tremendous brand (in India).”

Talent hub: The country is not just a promising market but a talent hub as well, MacDonald added. “We’ve got more than 2,000 people in the country that are integral to building our business around the world,” he said. “And we’re trying to add another 500 or so folks before the end of the year. India is going to be a critical part of Uber’s long-term story.”

Any talk of Uber’s exit from India is just “speculation”, he said.

MacDonald, who is a senior vice president at Uber, joined the company 10 years ago as general manager in Toronto, and has since risen through the ranks even as Uber underwent significant restructuring after its founder Travis Kalanick stepped down as CEO in June 2017.

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UPI, AA and ONDC will reorder Indian supply chain: Nilekani

The Unified Payments Interface (UPI), Account Aggregator (AA) framework and the Open Network for Digital Commerce (ONDC) will combine to revolutionise the Indian supply chain ecosystem, said Infosys chairman Nandan Nilekani.

He was speaking at the launch of new UPI solutions by the National Payments Corporation of India (NPCI) during the Global Fintech Fest.

The lending and payments ecosystem, he said, will benefit from the new solutions being rolled out and that will help a larger share of the population join the digital transaction ecosystem.

ONDC will have a big impact on e-commerce by allowing retailers, suppliers and logistics companies to engage with each other and will, in turn, impact hyperlocal commerce and big commerce, Nilekani added.

Infy cofounder on moonlighting: Meanwhile, Infosys cofounder Kris Gopalakrishnan weighed in on the ongoing controversy over ‘moonlighting’, or dual employment, saying employees should work only for one organisation to gain their employer’s trust and fully commit to the task assigned.

“If you want to give 100% to the task you have in hand, you need to be fully committed. You should be working for one organisation if you want to build trust and not help two-three (for-profit) organisations simultaneously,” he said on the sidelines of Global Fintech Fest in Mumbai on Tuesday.

Fintech industry must work relentlessly on safety to uphold people’s trust: PM

Prime Minister Narendra Modi said India’s fintech industry has earned goodwill by being an enabler of inclusion, and there is a need for continued focus to empower the poorest of the poor by taking quality financial services to them. He added the sector needs to work relentlessly on safety and reliability to uphold people’s trust.

In his message at the Global Fintech Fest, Modi said the sector has shown what can be achieved when a government that encourages innovation comes together with the energy of young and inventive minds.

In his words: “Innovation for inclusion has been our mantra, leading to the revolution in public delivery ensured by the JAM Trinity, success of UPI in making digital payments a way of life, and India’s global rise in the fintech and startup space as a hub of innovation and investment,” Modi said in the message, which was read out by Kris Gopalakrishnan. JAM Trinity refers to Jan Dhan-Aadhaar-Mobile.

Work with govt, FM tells fintech firms: Meanwhile, Finance Minister Sitharaman nudged the fintech industry to engage more with the government and its agencies to enhance trust.

“So greater the engagement, greater the trust, which gets built up. I think one sure-shot way of retaining and building on trust is to keep the constant engagement going,” she said.