Let’s take a look at some important numbers reported by these new-age companies.
Zomato, which had a blockbuster IPO in 2021, reported a widening of consolidated net loss at Rs 346.6 crore in the third quarter ended December 31, 2022.
Consolidated revenue from operations during the quarter under review stood at Rs 1,948.2 crore as against Rs 1,112 crore in the year-ago period.
According to Zomato CFO Akshant Goyal, there was an “industry-wide slowdown in the food delivery business since late October (post Diwali). This trend is across the country, but more so in the top eight cities.”
He quickly added the company is seeing “green shoots of demand which make us believe that the worst may be behind us”.
Meanwhile, Delhivery’s revenue fell 8% year on year to Rs 1,823 crore for the quarter ended December. Losses widened to Rs 195 crore from Rs 126 crore in the corresponding period last year.
The company in October 2022 had warned that high inflation would dent consumer spending and result in moderate growth in shipments for the rest of the financial year.
One97 Communications (OCL), the parent entity of mobile payments and financial services company Paytm, reported better-than-expected numbers as its consolidated net loss narrowed to Rs 392 crore in the third quarter.
The company had posted a net loss of Rs 778.4 crore in the same period a year ago.
Revenue from operations jumped about 42 per cent to Rs 2,062.2 crore during the quarter from Rs 1,456.1 crore in the year-ago period.
Brokerage firm Macquarie Research raised its 12-month target price for Paytm stock to Rs 800 in a report released, after slashing the target price of the scrip twice last year, from Rs 1,200 to Rs 800, and then to Rs 450.
Meanwhile, Chinese tech giant Alibaba on Friday exited One97 Communications by selling its remaining 3.3% stake through block deals. Alibaba.Com Singapore E-Commerce Pvt Ltd sold 2.14 crore shares for Rs 1,377.51 crore, NSE data showed.
PB Fintech, which operates insurance aggregator Policybazaar and credit marketplace Paisabazaar, reported a 69% spike in consolidated income to Rs 678.9 crore (year-on-year) in the third quarter. Sequentially, the increase is 7%.
It narrowed losses to Rs 87.6 crore in the quarter ended last December. Sequentially, the losses have more than halved.
Also read | For Cred, revenue growth and curbing losses will be the focus: Kunal Shah
Ban on quick-loan apps and its repeal – all in a week
Days after banning 94 digital-lending platforms and 138 betting and gambling apps, the IT ministry on Friday revoked the order for some affected companies such as PayU-owned LazyPay and Kissht after the aggrieved fintech startups submitted documents detailing their shareholding structure to the government.
Apps caught unawares: The government on Sunday issued orders to block 138 betting and gambling apps and 94 quick loan apps on an “urgent” and “emergency” basis for “improper data storage and transfer” to other countries as well as money laundering.
ET exclusively reported on Monday that the order banning 94 lending apps also included apps of Indian firms including PayU’s LazyPay.
The list of apps and portals banned included LazyPay, Ola-owned Avail Finance, Indiabullshomeloans.com, Faircent, Kissht, and others.
Two days later on Tuesday, founders of several lending platforms met officials of the Ministry of Electronics & Information Technology (MeitY) in New Delhi seeking clarifications on the ban.
Why the ban: The ban was on account of three broad categorisations – first, the list of apps include those that may have ultimate or partial ownership with Chinese entities; second, lending apps which are not regulated by the RBI and which may be storing data in Chinese servers, and lastly, apps being run by companies against which customer complaints of recovery harassment have been made.
Legitimacy proved: Aggrieved online lending platforms also submitted documents detailing their shareholding structure to the government. They were also expected to submit certificates showing that they are regulated by the Reserve Bank of India (RBI).
On Friday, MeitY issued orders to internet service providers (ISPs) and Play Store operator Google to unblock some of the digital lending apps and websites that were part of a list of apps banned by the government recently.
Revocation orders were sent for platforms including PayU-owned LazyPay and Kissht. Others on MeitY’s list to be unblocked included Indiabulls Housing Finance’s indiabullshomeloans.com, buddyloan.com, faircent.com and Aptoide versions of some digital-lending platforms such as KreditBee and mPokket.
Tech policy
Ecommerce firms may soon start displaying ‘red alerts’ on unhealthy food: The Food Safety and Standards Authority of India is likely to mandate online marketplaces to prominently display key health and nutritional alerts alongside the retail price for packaged items sold on their platforms. FSSAI is evaluating a proposal to enforce front-of-the-pack nutritional labelling to alert consumers about high fat, sugar and salt foods in a bid to curb consumption of unhealthy foods.
Online gaming companies ping MeitY against IAMAI’s note on draft rules: Four of the largest gaming firms Dream Sports – which runs Dream11, Mobile Premier League, Zupee and Games24x7– which are part of the industry association Internet and Mobile Association of India (IAMAI), have written a note to Ministry of Electronics and Information Technology distancing themselves from the industry association’s recent statement that said draft gaming rules were ‘right on intent but poor on scoping’.
Valuation rules to be reviewed for Angel Tax on foreign Investments: India will investigate the valuation rules for the so-called ‘angel tax’ on investments by overseas investors in startups. A senior official said the government is examining the different valuation criteria prescribed under two separate laws which could lead to disputes and litigations. Such overseas investment is valued differently under the Foreign Exchange Management Act (FEMA) and the Income Tax Act.
Layoffs & cost cuts
Startups to cut costs further as funding crunch continues: The next 10-12 months will be uncertain for startups as companies – large and small – look to prune costs further, multiple investors and founders said, as the industry goes through a significant drop in funding. They told ET that even after undertaking layoffs, additional cost-cutting measures will have to be implemented to wade through the tough period.
TikTok India employees get pink slips en masse: ByteDance-owned short video app TikTok fired its entire India workforce earlier this week, sources aware of the development told ET on Thursday. As many as 40 people were given the pink slips on Monday after a call and were told that they would be given up to six-seven months of severance pay, they said.
About 6,000 Indian startup employees laid off in Oct-Dec 2022: Startups in India fired about 6,000 employees in October-December 2022 and another 4,000 or so in January 2023 alone, according to a CIEL HR Services study. With investors tightening their purse strings because of the volatility in the global economy, many unicorns and startups such as Byju’s, Swiggy and Ola have slowed down hiring or even resorted to firing employees.
Expensive mid-level IT staff face higher scrutiny as firms tighten belts: Mid-level employees hired at exorbitant salaries in IT companies will have to justify their performance and contribution to margins in a tougher economic environment, analysts have said. Salary increases will be muted this year as companies try to optimise costs and better utilise employees amid macroeconomic headwinds and geopolitical concerns. Senior employees who have been hired at a premium over the past two years will also face greater scrutiny.
Other top stories this week
HC grants interim relief to Flipkart on Rs 1,100-crore income-tax case: The Karnataka High Court has granted an interim stay on a tax demand of around Rs 1,100 crore against Flipkart India. In an interim order, the High Court also said no coercive action should be taken against the e-commerce company till February 24, the next data of hearing on the matter.The issue pertains to assessment years 2016-17 and 2018-19. Flipkart, which was asked to submit the demand within four days, had moved court to challenge the notice.
Tech glitches with MCA portal | govt may start accepting physical filings: The Ministry of Corporate Affairs (MCA) is planning to accept submissions of some company forms in physical format after reports of glitches with its MCA21 portal, people privy to the developments told ET. The portal is used by companies to make regulatory filings, including form PAS-3, which they need to file before they can use funds raised from investors.
India may invite more companies to set up semiconductor units: The Centre is likely to invite a “second round” of applications for semiconductor chip manufacturing in the country under the $10 billion incentive package, a person aware of the developments told ET. It is also in “advanced talks” with four global semiconductor companies to set up fabs, with those having expressed interest including the likes of New York-headquartered GlobalFoundries and a major Korean semiconductor firm.
Ola Electric delays delivery of S1 Air: Ola Electric will delay deliveries of its cheapest scooter, S1 Air, by three months to July, it said on Thursday. Bhavish Aggarwal said the delay was due to the time taken to “accommodate” the new variants it announced on Thursday, and changes in the original battery size of S1 Air. Deliveries of the S1 Air, priced at Rs 84,999, were supposed to begin in March.
Steep prices keep Indian users from Twitter Blue tick: Twitter users in India largely gave a thumbs down to its paid subscription service – Twitter Blue – on Thursday, saying the prices were steep by Indian standards. At Rs 900 per month for mobile devices and Rs 650 for web devices, users said the blue checkmark had little value-add beyond ‘bragging rights’.
(Graphics and illustrations by Rahul Awasthi)
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