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ED Tightens the Noose Around Byju’s Founder: Puts His Travel Plans Under Lens

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byju Raveendran

Byju’s, already grappling with financial challenges, now faces an additional obstacle as its founder, Byju Raveendran, comes under suspicion of contemplating an exit from India. Citing sources, the Economic Times reported that the Enforcement Directorate (ED) has prompted the Bureau of Immigration (BOI) to issue a lookout circular (LOC) against Raveendran. This development aligns with the ongoing investigation by the ED’s Bengaluru office into potential Foreign Exchange Management Act (FEMA) violations involving both the edtech startup and its founder.

For those unfamiliar with the concept, the LOC ‘on intimation’ permits immigration authorities to notify a probe agency about an individual’s overseas travel without hindering their departure.

Recently, a group of shareholders at Byjy’s has called for an Extraordinary General Meeting (EGM) scheduled for February 23, 2024. There is uncertainty surrounding whether CEO Raveendran is deliberately avoiding participation in this meeting, or if there are other factors at play that remain undisclosed.

It is important to note that the LOC ‘on intimation’ was previously issued against Raveendran over eighteen months ago at the behest of the ED’s Kochi office. However, with the subsequent transfer of the investigation to the Bengaluru office, the necessity for an updated LOC has come to the forefront.

Over the past three years, Raveendran has been a frequent traveller, shuttling between Delhi and Dubai. Despite recent reports indicating his presence in Bengaluru earlier this week, Raveendran clarified to ET that he is presently in Dubai and intends to embark on a journey to Singapore tomorrow. This travel pattern adds another layer of complexity to the ongoing situation, raising questions about the founder’s whereabouts and potential implications for the investigation.

Underlining the significance of the Lookout Circular, a senior government official emphasized that its issuance, even with Raveendran currently overseas, serves as a preventive measure to obstruct his departure upon return. This precautionary measure is designed to protect the interests of Byju’s investors and ensure a seamless resolution to the case.

ED Previous Allegations Against Byju’s

The challenges for Byju and its founder began unfolding in April 2023 when the Enforcement Directorate (ED) conducted raids on two business premises and a residential property in Bengaluru.

The ED, through a press note, disclosed that Byju’s had received an estimated Rs 28,000 crore (Approx $3.4 billion as per today’s rate) in foreign direct investments between 2011 and 2023. Additionally, it was revealed that the company had sent approximately Rs 9,754 crores (US$1.22 billion) to foreign entities under the overseas direct investment scheme during the same period.

In response to these findings, the ED issued show-cause notices in November 2023 to Byju’s parent, Think & Learn, and Raveendran. The notices were related to alleged violations amounting to ₹9,362.35 crore under FEMA.

Against the backdrop of controversies and financial challenges, Byju’s has faced a considerable decline in its valuation over the past two years by its two major investors, Prosus and BlackRock. Prosus slashed Byju’s valuation from $22 billion in early January 2022 to less than $3 billion by November 2023. The downward trend continues as BlackRock devalues Byju’s, bringing its valuation to under $1 billion in January 2024.

In a Nutshell

Byju’s financial troubles, coupled with the ongoing ED investigations and the issuance of a lookout circular against Raveendran, create a perfect storm that could threaten the edtech company’s future.

Byju’s has vacated many of its major office properties due to non-payment issues in the last 12 months. Investors are increasingly vocal in their call for a change in leadership. The demand for the ouster of the current board, comprising Raveendran, his wife and co-founder Divya Gokulnath, and his brother Riju Raveendran, reflects the growing concern and dissatisfaction among stakeholders.

It is now evident that Byju’s cannot reclaim its status as India’s edtech giant under the current leadership of CEO Raveendran, as both employees and investors have lost confidence in his ability to steer the company effectively.

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Amazon Bets Big on Unbranded Bazaar in India: Aggressive Price Strategy to Conquer Tier II and III Cities?

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Amazon Bazaar Shopping platform

Indians consistently prioritize price over brand recognition, and Amazon seems to have realised this trend. The e-commerce giant is strategically betting on its soon-to-be-launched low-price shopping platform, “Bazaar”, aiming to woo value-conscious customers across tier II, III and IV cities in India. Amazon Bazaar will reportedly offer an array of unbranded fashion and lifestyle products, encompassing categories like apparel, watches, shoes, jewellery and luggage, all competitively priced below Rs 600.

What’s more interesting is that Amazon Bazaar isn’t just aiming to entice budget-conscious shoppers; It’s also extending a warm welcome to sellers.

The operational phase of the Bazaar as a marketplace has commenced, with Amazon actively onboarding sellers and encouraging them to list unbranded products. These insights were revealed by ET, which meticulously reviewed the company’s communications with merchants.

Amazon’s foray into affordable, unbranded fashion and lifestyle products seems like a well-calculated response to the shifting dynamics of the Indian consumer market. The decision is primarily attributed to the declining demand for mass-market products, leading to a slowdown in Amazon’s growth trajectory within India. The surge in Indians opting for premium products, fueled by substantial discounts and bank offers, has further influenced this strategic move.

Currently, India’s online mass-market fashion segment has seen successful penetration by SoftBank-backed Meesho. Another major player in the space is Walmart-owned Flipkart Shopsy, operating through a separate app. Adding to the competitive landscape, Mukesh Ambani-led Reliance Industries is also actively working on a low-price platform, Ajio Street.

What’s In It For Sellers?

For sellers, Amazon Bazaar presents an enticing proposition. Amazon is putting forward a zero-referral fee for merchants, a critical incentive, particularly for products with a low average selling price (ASP). In addition, the company has removed closing fees for merchants using its Easy Ship service to sell on the Amazon Bazaar platform.

By eliminating referral fees and easing closing fees, Amazon creates an enticing environment for merchants who might have found the traditional commission structure a tad daunting. This opens the door for smaller players and unbranded goods, promising a treasure trove of diverse products for the price-savvy crowd.

“Bazaar is a new store on Amazon where you can sell your fashion and lifestyle products online at no extra charges, thus making it more profitable to run your business,” a document from Amazon to sellers said.

Affordability Over Immediacy

The delivery timelines for products on the Amazon Bazaar platform are anticipated to be approximately 2-3 days. This deliberate decision reflects a calculated move by Amazon, placing a higher emphasis on affordability over immediacy.

Understanding the mindset of the value-conscious consumer, Amazon acknowledges that a slightly prolonged wait of a few days is a minor compromise for the significant savings offered on the Bazaar platform. Therefore, the company’s focus on affordability aligns seamlessly with the preferences and priorities of its target audience, serving as a crucial element in its strategy within the competitive market.

Amazon Facing Competition From Local Players

Meesho, a significant player in India’s online marketplace, operates on a zero commission model with an average selling price (ASP) ranging between Rs 300-350. Its revenue model relies on advertising and logistics services to sellers, distinguishing it from Amazon and Flipkart, which manage their own warehouses and logistics.

Satish Meena, an independent e-commerce analyst and advisor at Datum Intelligence, notes that Meesho has effectively captured market share from Amazon, particularly in segments such as fashion and homecare. To compete in low ASP segments, Amazon must provide products akin to those offered by Meesho to both merchants and consumers. The analyst further observes that even Amazon Fashion in India has not replicated the success of Myntra, indicating challenges in finding the right approach for this market.

Therefore, the impending launch of the Bazaar marketplace is viewed as yet another effort by Amazon India to establish a stronger presence in the fashion segment and ultimately acquire new customers in India.

In January 2024, Amazon.com, Inc. infused Rs 830 crore (approximately $100 million) into its India entity, Amazon Seller Services. This strategic investment aligns with the company’s efforts to revitalize its growth in India, particularly in the wake of challenges posed by local players in the value-conscious segments.

The question remains: Will Amazon Bazaar weave its magic and emerge as the price whisperer of the Indian e-commerce market? Only time will tell, but the potential for transformative impact is undeniable. In smaller cities, it could evolve into a digital bazaar, brimming with affordable finds. The intensified competition in this segment could spark price wars, ultimately showering consumers with even more enticing deals. Let us know your thoughts in the comment section below!

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Byju’s May Have to Shutter All Major Offices Across India: Defaults on Rent, Receives Multiple Legal Notices

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Byju vacating offices

Byju’s has been grappling with a financial storm for quite some time, prompting it to take significant measures to weather the challenges. In the latest move, the edtech firm has downsized its office space in Bengaluru as part of ongoing cost-cutting measures. Byju’s has recently vacated an expansive 400,000 sq ft property at Prestige Tech Park, citing rental disputes and persistent challenges involving other landlords.

The recent reduction in office space follows a similar move between 2022 and 2023 when Byju’s vacated its largest office space, a 558,000 sq ft property in Kalyani Tech Park, 70,000 sq ft property in IBC Knowledge Park, along with relinquishing two out of nine floors in Prestige Tech Park.

The financial strain on Byju’s is particularly evident in its termination of the lease agreement for the Prestige Tech Park office space, where the company was paying a monthly rental of approximately Rs 4 crore. The termination, confirmed by Juggy Marwaha, CEO of Prestige Office Ventures, occurred in January this year, with the deposit adjusted against rent defaults.

“We tried our best to realign rents and give them some relaxation. When rental payments still didn’t come on time, we had no choice but to adjust the security deposit and request that they release the space back to us, which we settled amicably,” Juggy Marwaha, CEO of Prestige Office Ventures, said.

Additionally, Byju’s is currently facing legal action from Kalyani Developers for defaulting on rental payments for a substantial 500,000 sq ft office space situated at Kalyani Tech Park in Bengaluru. This lease agreement includes a lock-in period extending until March 2025.

An informed source detailed that Byju’s outstanding amount to Kalyani Developers totals ten months’ rent, with seven months’ worth being adjusted against the deposit. Despite attempts to obtain a response from Byju’s through email, the company has not provided any feedback as of the press time. Adding to the complexity of the situation, even though Byju’s retains ownership of the assets associated with the property, there is currently no operational activity taking place at this location.

Does this suggest that Byju’s is on the verge of shutting down all its major offices across India, resulting in a permanent shift to remote work for all its employees? Quite likely!

Byju’s had a total of 17,422 employees in October 2023.

Raveendran Under Fire

However, the troubles for Byju’s don’t end there. Investors, once brimming with enthusiasm, are now voicing their dissent. Reports of mismanagement and financial distress have fueled calls for the ouster of CEO Byju Raveendranand, and restructuring of the board. This discontent arises even after the company recently secured commitments worth $300 million from investors for its $200 million rights issue.

A group of shareholders at Byjy’s has initiated a call for an Extraordinary General Meeting (EGM) scheduled for February 23, 2024. The primary objectives of this meeting are to address governance issues and advocate for changes at the executive level. It is noteworthy that the shareholders advocating for these changes collectively command a significant stake in the company.

Byju’s downsizing spree isn’t just about shrinking office space; it’s a stark symbol of a once-dominant edtech giant grappling with an existential crisis. Although the company is leaving no stone unturned to weather this financial storm through cost-cutting and investor appeasement, the question remains: can Byju’s rise again from the ashes?

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India Smartwatch Shipments Grew 74% YoY in 2023: A 3-Year-Old Brand Enters Top Five, Outpacing Samsung!

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India Smartwatch Shipments 2023

Smartwatches are selling like hotcakes. The adoption and usage of smartwatches in India have skyrocketed since the COVID-19 pandemic as people became more health conscious. According to IDC’s latest report, the smartwatch shipments in India grew a whopping 73.7% YoY in CY 2023 to 53.4 million units. Notably, smartwatches accounted for 39.8% share of the total wearable devices shipped in the country last year.

The surge in demand for smartwatches in India is primarily attributed to affordability during the festive season sales, heavy discounts, and a diverse range of options available in the market.

However, the growing popularity of non-branded watches has impacted the overall demand for high-end smartwatches from established players. These non-branded smartwatch vendors are strategically targeting first-time users by offering cheap alternatives to popular models, often bundled with multiple watch straps. As a result, the share of advanced smartwatches shrank from 4.5% in 2022 to 2.1% in 2023, resulting in the shipment of 1.1 million units. These factors collectively contributed to a strong 38.7% YoY drop in the Average Selling Price (ASP) of smartwatches in India, falling from US$42.5 in 2022 to US$26.1 in 2023.

Looking at the bigger perspective, the shipments of wearable devices in India grew an impressive 34% YoY to a record 134.2 million units. Despite numerous new launches, promotional offers, and discounts during the holiday season, the average selling price (ASP) of overall wearables declined a notable 15.4% YoY to US$21.2 in Q4 2023.

Key Highlights: Top Smartwatch Brands in India

  • Fire – Boltt emerged as India’s top smartwatch brand in 2023, surpassing Noise (Nexxbase). The brand recorded a strong 70% YoY growth in its smartwatch shipments last year. Despite this substantial growth, the shipment share of Fire-Boltt declined from 24.8% in 2022 to 24.3% in 2023.
  • Noise (Nexxbase) slipped to the second spot in the list of India’s top five smartwatch brands in 2023. Despite achieving an impressive 41.3% oY growth in smartwatch shipments last year, the brand witnessed a notable decline in its market share, dropping from 27.2% in 2022 to 22.1% in 2023.
  • boAt (Imagine Marketing) has consistently lost its smartwatch market share to competitors. In 2021, boAt held a 25.1% share of India’s smartwatch market, which declined to 18.8% in 2022 and further to 14.0% in 2023. The year-over-year growth in shipments also experienced a significant decline, dropping from 88.7% YoY in 2022 to just 29.3% YoY in 2023.
  • Titan emerged as the fastest-growing smartwatch brand among the top five players in India in 2023. Titan’s smartwatch shipments grew an astonishing 283.4% YoY during the year, claiming the fourth spot in India’s smartwatch market. Notably, Titan’s market share more than doubled, increasing from 2.4% to 5.2% in just 12 months.
  • Samsung is not only struggling in the smartphone industry but also in the smartwatch market in India. The South Korean giant is no longer among the top 5 smartwatch brands in 2023, being surpassed by BeatXP.
  • Founded in 2020, BeatXP, a Gurgaon-based Fit-tech startup, has risen to become India’s fifth-largest smartwatch brand, securing a 3.8% market share in 2023.

It is surprising that, despite the global trend towards online shopping, India continues to show a preference for offline retail experiences. This is evident in the smartwatch market, where shipments to offline channels outpaced online ones, registering an impressive 55.6% YoY growth in 2023. In contrast, smartwatch shipments through online channels grew 26.1% YoY during the year.

India’s smartwatch market is experiencing unprecedented growth, dynamically adapting to evolving consumer behaviours, technological advancements, and the interplay of online and offline channels. The competition is fierce, and the emergence of new players like BeatXP, surpassing established giants like Samsung, adds an element of unpredictability. It would be interesting to see which smartwatch vendor will claim leadership in 2024.

Which smartwatch do you currently use, and what factors influence your decision when upgrading to a new brand? Let us know in the comment section!

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Over 20 Million Paytm Users in Limbo as Fastag Ban Sparks Chaos

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paytm fastag

The ban imposed by the Reserve Bank of India (RBI) on Paytm Payments Bank turned out to be just the opening act of a regulatory drama for Vijay Shekhar Sharma-led One97 Communications. Compounding the challenges, the Indian Highways Management Company (IHMCL) has now directed highway travellers to ditch Paytm and snag FASTags from a curated list of 32 banks. This deliberate exclusion is a direct result of Paytm Payments Bank currently undergoing regulatory scrutiny for alleged rule violations.

With over 70 million Fastag users in India, Paytm Payments Bank asserts a significant 30% market share, translating to more than 20 million users. In response to the impending shift, these 20-million-plus Paytm Fastag users are set to receive new RFID (radio frequency identification) stickers, as existing Paytm Fastags will be inoperative after February 29. This strategic move aims to ensure a seamless experience for millions of Paytm Fastag users on toll roads after the specified cutoff date, as revealed by sources familiar with the matter to ET.

The banks enlisted by the National Highway Authority of India (NHAI), managed by IHMCL, for Fastag services are extensive and prestigious. The list includes Airtel Payments Bank, Allahabad Bank, AU Small Finance Bank, Axis Bank, Bank of Baroda, Bank of Maharastra, Canara Bank, Central Bank of India, City Union Bank, Cosmos Bank, Equitas Small Finance Bank, Federal Bank, Fino Payments Bank, HDFC Bank, ICICI Bank, IDBI bank, Idfc first Bank, Indian bank, Induslnd bank, J&K Bank, Karnataka bank, Karur Vysya bank, Kotak Mahindra Bank, Nagpur Nagarik Sahakari bank, Punjab National Bank, Sarswat bank, State Bank of India, Thrissur District Cooperative bank, UCO Bank, Union bank of India, and Yes Bank.

What’s surprising is that none of these 32 banks are currently willing to onboard Paytm Fastag users. Banks may be hesitant to extend their services to Paytm Fastag users, possibly fearing potential reputational damage or regulatory scrutiny, particularly if issues arise with any of Paytm Fastag users.

“The only option left for such customers is to cancel the Paytm Fastag and buy new ones from any of the banks (listed by IHMCL),” Sources told ET.

FASTag is an RFID-based device revolutionizing toll payments for vehicles in motion. The RFID chip, affixed on the vehicle’s windscreen, allows customers to make seamless toll payments directly from their linked accounts. Operational at over 750 toll plazas, including national and state highways, FASTag simplifies and expedites the toll collection process across India.

What Will Happen to Your Paytm FASTag Balance?

Now, you must be wondering what will happen to the monthly or annual balance in Paytm FASTag if the customer opts for a switch.

Typically, banks providing FASTag services have well-established procedures for customers who wish to migrate from one service provider to another. This process may involve the deactivation of the existing FASTag (issued by Paytm in this case) and issuing a new one from the chosen bank. During this process, the entire balance in the Paytm FASTag account will either be refunded to the customer, or smoothly transferred to the new FASTag.

Customers are advised to contact both Paytm and the new bank promptly to ensure a smooth transition and obtain accurate information about the balance transfer process. It’s essential to be aware of any terms and conditions associated with the balance transfer, including potential fees or charges that may be applicable during the transition.

Paytm UPI Slowdown Raises Concerns

A noticeable slowdown in Paytm’s UPI transactions in India has become another concern. Data from the National Payments Corporation of India (NPCI) indicates a stagnation in Unified Payments Interface (UPI) transactions originating from Paytm Payments Bank (@paytm) over the past six months. Corporation of India (NPCI). In August 2023, Paytm Payments Bank reported a substantial 455.52 million UPI transactions, which declined to 410.19 million by the end of December 2023. On a broader scale, UPI transactions on Paytm’s proprietary handle (@paytm) surged only a modest 6.1% YoY between December 2022 and 2023.

Since the RBI imposed a ban on its banking services, Paytm shares have been on a downward trajectory. On February 16, at 9.30 am, the stock reached a new low, trading at Rs 324.40.

Other Fintech Startups Under Scrutiny

In the aftermath of the Paytm fiasco, the spectre of regulatory action looms over more payment banks in India. In a recent development, the Financial Intelligence Unit (FIU) has identified roughly 50,000 accounts lacking Know Your Customer (KYC) verification, potentially involved in suspicious transactions and money laundering activities. Notably, around 30,000 of these accounts belong to payments banks other than Paytm Payments Bank. The details have already been provided to the Reserve Bank of India (RBI) for further investigation.

In addition, the Enforcement Directorate (ED) has been probing a Mahadev app scam involving 10,000 UPI accounts registered with Paytm. However, after the RBI’s crackdown on Paytm Payments Bank, One97 Communications denied ED’s money laundering probe, citing reports as “malicious.”

Industry analysts emphasize that KYC challenges are not just limited to Paytm Payments Bank as many fintech startups, in their pursuit of rapid customer onboarding, often take shortcuts. This practice becomes more pronounced as these companies expand, leading to a significant challenge in effectively managing risk and compliance.

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Apple Vision Pro Meets Reality: Early Adopters Returning Within Just 14 Days

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Apple Vision Pro issues

Apple, Inc. (NASDAQ: AAPL) is renowned for the top-notch quality and innovation of its products, be they iPhones, Mac devices, or Apple Watches. However, the same can’t be said for Vision Pro, the mixed reality headset. Despite initial excitement, a noteworthy number of Apple Vision Pro buyers are opting to return their $3,500 headsets just as the 14-day return window closes.

Social media is abuzz with complaints about Apple’s VR device, highlighting comfort and usability issues as key reasons for dissatisfaction. Among those returning the Apple Vision Pro headsets are prominent figures such as leading device reviewers and influential tech personalities.

It is important to note that Vision Pro marks Apple’s first significant foray into a new product category since the debut of the Apple Watch in 2015.

Apple Vision Pro Faces Critical Backlash

Comfort emerges as the most predominant issue, leading to an influx of returns for the Apple Vision Pro headset. Numerous users cite headaches and motion sickness as the primary reasons for their dissatisfaction. The weight, particularly the front-loaded design of the device, compounds the discomfort experienced by Vision Pro users. Prominent tech figure Parker Ortolani, serving as The Verge’s product manager, goes beyond typical discomfort, expressing concern about the device causing a burst blood vessel in his eye.

Matthew Cassinelli, an independent content creator, also shared a similar sentiment, noting redness in his eyes after using the Vision Pro. The collective feedback highlights a critical challenge for Apple in ensuring the comfort and well-being of users with their latest headset offering.

A user on Threads mentioned feeling dizzy while looking at Figma screens, expressing that the device wasn’t suitable for their work. Another engineer on the social media platform X conveyed disappointment, stating that the coding experience failed to meet expectations, and focusing issues led to headaches.

Comfort Challenges: A One-Size-Fits-All Quandary?

A prevailing issue in the wearable technology sector is the widespread adoption of a “one-size-fits-all” approach, significantly impacting users’ comfort. Apple Vision Pro users have highlighted concerns such as unsuitable strap designs, uneven weight distribution, and compatibility issues with individual facial features as critical shortcomings.

However, creating a wearable device tailored to every human body proves to be a formidable challenge and appears unattainable, especially when considering the unique facial characteristics of each individual. This complexity becomes pronounced when attempting to scale wearable production for the mass market. Regrettably, achieving universal comfort becomes a casualty in the process, affecting individuals disproportionately. It is not possible for tech companies to make more than 3-4 sizes for wearable devices.

Beyond Hardware: Productivity Concerns Surface

Apart from hardware concerns, a prevalent issue with the Apple Vision Pro is the perceived lack of productivity applications relative to its cost.

As one Reddit user succinctly put it, “If I’m not using this for productivity, and if I don’t love it for entertainment, and if there aren’t enough games to play on it – I just can’t justify keeping it.”

Carter Gibson, a senior manager responsible for community management and moderation at Google, highlighted the considerable challenges associated with multitasking between different ‘windows’ and managing files on the Apple Vision Pro. He identified these issues as critical factors that could potentially disrupt productivity. Gibson also noted that there is a noteworthy limitation in file type support on the Vision Pro. Additionally, he expressed doubts about the energy efficiency of creating a presentation slide on the Vision Pro compared to the traditional method involving a mouse and keyboard.

Gibson’s observations draw attention to specific usability concerns affecting the practical functionality of the Apple Vision Pro.

In A Nutshell

Apple is not alone in facing issues with its Vision Pro device, and these complaints shouldn’t necessarily be seen as a sign of Apple’s neglect in developing it. The broader context suggests that AR/VR headsets, whether from Apple, Facebook, or other companies, have not yet reached a level of maturity suitable for prolonged use. This is evident from several reports of VR headset users experiencing dry eyes and redness over the years.

However, one can’t deny that Apple’s Vision Pro is the world’s most expensive and innovative VR headset. Therefore, the issues raised by early users can’t be overlooked. Determining the impact of this vocal subset of early adopters on the future sales of the Apple Vision Pro remains uncertain. Surprisingly, many dissatisfied users who intend to return the device also express openness to trying a second-generation Vision Pro. Have you had the chance to experience the Apple Vision Pro? If so, share your experience with us in the comment section below!

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Reliance Makes Another Move To Dominate the Indian OTT Landscape

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Reliance Tata Play deal

Reliance Industries Limited, led by the ambitious Mukesh Ambani, is leaving no stone unturned to dominate India’s entertainment space, encompassing both Over-the-Top (OTT) and Television distribution domains. In the latest development, Reliance is reportedly in discussions to acquire Disney’s 29.8% stake in Tata Play, the country’s largest subscription-based satellite television (DTH) service provider. This strategic move aligns with Ambani’s overarching goal of elevating JioCinema to become India’s most popular and widely embraced OTT streaming platform.

Reliance is also negotiating with Walt Disney to acquire Hotstar, further solidifying its position in the dynamic entertainment landscape. Rumours of RIL’s interest in acquiring Hotstar had been circulating for some time. However, the confirmation came in December 2023 when authoritative sources involved in the negotiations revealed their meticulous efforts on a non-binding term sheet.

Ambitions for JioCinema

If the Reliance Tata Play deal materializes, Reliance would not only solidify its standing in India’s television distribution sector but also secure access to the entire Tata Play customer base, ultimately expanding the reach of its OTT platform, JioCinema. Reliance’s existing presence in cable TV, with significant ownership stakes in Hathway (75%) and Den Networks (74.9%), would be complemented by this potential acquisition.

Karan Taurani, an analyst affiliated with Elara Capital, has shared his perspective on the potential acquisition of a stake in Tata Play by Reliance. He asserts that this proposed deal is a logical move for Reliance. He points out that Reliance is already established on the MSO (multiple-system operator) side but lacks a presence on the (DTH) (direct-to-home) side, which delivers television content directly to viewers via satellite.

With the current market dynamics favouring DTH over MSO and DTH boasting a more premium customer base in terms of ARPUs (Average Revenue Per User), Taurani suggests that DTH services have a “protected base” of premium customers who are less likely to switch providers, providing stability.

By leveraging the premium customer base of DTH, JioCinema, Reliance’s streaming platform, could gain a strategic advantage. This move positions the OTT platform to outperform existing players such as Netflix, Amazon Prime Video, and Hotstar, intensifying competition for user subscriptions in the market.

As of March 2023, Tata Play boasts 21.3 million subscribers, representing 32.65% of total DTH users in India, according to TRAI.

Additionally, Karan Taurani, believes that Reliance’s foray into the DTH segment through Tata Play would ease competitive pressures, especially considering the conglomerate’s bundled offerings.

What’s In It For Tata Play & Customers

For Tata Play, acquiring access to JioCinema’s extensive content library could serve as a catalyst, potentially revitalizing its offerings and drawing in new subscribers in India. In addition, collaborating with industry giants like Reliance would provide much-needed resources and strategic direction for Tata Play, helping it navigate the competitive landscape.

Depending on how the deal is structured, Indian consumers would surely benefit from bundled offerings, wider content choices, and potentially lower prices.

Overall, the Reliance Tata Play deal signifies a strategic alignment between two major players in the Indian media and entertainment landscape, poised to reshape the industry’s dynamics.

Current Ownership Structure

As of now, Tata Sons, the holding company of the Tata group, holds a majority stake of 50.2% in Tata Play. The remaining ownership structure includes a 29.8% stake owned by Walt Disney Co. and the rest of the shares held by Temasek, a Singapore-based investment firm.

In December 2023, reports emerged that Walt Disney plans to divest its 29.8% stake in Tata Play Ltd during the proposed initial share sale by Tata Play. The decision is primarily driven by Disney’s strategic focus on prioritizing its broadcast and streaming service businesses in India. However, due to the planned listing delay, Disney has initiated exploring alternative exit strategies.

In October last year, media sources indicated that the Tata Group is in advanced discussions with Temasek Holdings Pte to buy back its 20% stake. The valuation of this potential buyback is reported to be in excess of $1 billion, according to individuals familiar with the matter.

According to Business Standard, bankers are currently evaluating the worth of Disney’s stake in Tata Play. This scrutiny is not without cause, as Tata Play, despite maintaining a substantial market presence, reported a 5% YoY decline in its revenue, amounting to Rs 4,499 crore, while the losses increased 53% YoY to Rs 105 crore in FY23, ending on March 31, 2023.

What are your thoughts on Reliance’s potential acquisition of stakes in Tata Play to establish JioCinema as India’s largest entertainment platform for everyone?

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OYO IPO Plan in Doldrums: Is it Valuation Blues or Something More?

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Oyo IPO pause

OYO, India’s hospitality startup that once aimed for a grand public debut, is reportedly finalizing plans to withdraw its IPO application filed with SEBI (Securities and Exchange Board of India). This unexpected detour throws their public listing aspirations into question, leaving many wondering what went wrong.

OYO Hotels & Homes has been deliberating on this IPO withdrawal for some time, and it appears to be imminent, with all key stakeholders duly informed. Simultaneously, the company has reportedly initiated discussions with private market investors to secure fresh funding over the next six to eight months.

However, OYO, responding to queries by ET, refuted the information, deeming it “inaccurate and unconfirmed by the company representative or our IPO bankers or counsels.”

OYO’s IPO withdrawal plan coincides with recent developments wherein, just a day before, media reports highlighted that the company’s lead bankers and senior executives had engaged with SEBI. The primary objective of this strategic meeting was to expedite the approval process for its IPO. Additionally, OYO informed the regulator about a partial prepayment of $200 million towards the outstanding Term Loan B (TLB) from its financial books. The company’s leadership team utilized this strategic engagement to present a comprehensive overview of Oyo’s financial performance, providing updates covering the last four quarters.

OYO IPO Saga: Hits the Pause Button

In October 2021, OYO took its first step toward an initial public offering (IPO) by submitting a draft application amounting to ₹8,430 crore ($1.2 billion). However, the trajectory took an unexpected turn in September 2022 when SoftBank discreetly devalued Oyo from $3.4 billion to $2.7 billion.

Although this adjustment in OYO’s valuation remained private, the last publicly reported valuation for the hospitality firm stood at over $9 billion. Despite this, the markets regulator Sebi returned Oyo’s initial public offering filing in January 2023, necessitating a recalibration. The SoftBank-backed company was directed to refile its draft red herring prospectus (DRHP) with requisite updates and revisions.

In response, OYO, in April 2023, confidentially pre-filed with Sebi for a significantly reduced IPO size, ranging between 40-60%. This move was part of a broader directive for companies to refile applications with a smaller secondary share sale portion than initially proposed.

Recent reports suggest that OYO is considering withdrawing its IPO application from Sebi. This development raises questions about the factors influencing OYO’s reassessment of its IPO strategy, prompting a closer examination of the challenges the company may be grappling with.

OYO Facing Troubles: What Went Wrong?

OYO’s revenue from operations increased 14.3% YoY to INR 54.64 billion in the fiscal year 2023, ending March 31, 2023, while the losses declined 33.7% YoY to INR 12.87 billion during the same period.

A noteworthy milestone for OYO was achieved in the second quarter of fiscal year 2024, ending September 30, 2023, as the company reported its first profitable quarter. This positive trend persisted into the third quarter of FY24, ending December 31, 2023, where OYO generated a net profit of Rs 30 crore, doubling from the Rs 16 crore reported in the previous quarter.

Despite the recent positive financial indicators, including declining losses and the achievement of profitability in the last two quarters, OYO faces the challenge of convincing potential investors about its sustained profitability in the future. The uncertainty surrounding future profitability could directly impact investor confidence and, subsequently, influence the IPO issue and listing price.

Adding to its challenges, Oravel Stays Limited, the parent company of OYO, had secured a substantial $660 million term loan B in July 2021, with repayment scheduled for late 2025. As of now, the company holds a cash reserve ranging between $200 and $250 million. Even though OYO has shown improvements in operating profitability, the impending repayment obligation in 2025 necessitates strategic financial planning and raises the need for additional funding. In response to these financial dynamics, OYO is actively exploring avenues to secure additional funding.

According to a Bloomberg report on January 25, OYO has entered discussions with the Malaysian sovereign wealth fund Khazanah Nasional Berhad to raise $400 million at a valuation of $6 billion. Talks with at least two other investors are also in the preliminary stages.

In another development, Rajnish Kumar has stepped down from his role as the group strategic advisor at OYO. This decision came after his contract concluded in December 2023. He is concurrently serving as the chairman of the board at BharatPe and holding a position on the advisory council of the troubled edtech company Byju’s.

In addition to OYO’s internal challenges, the funding winter gripping the Indian startup ecosystem for the past two years has added another layer of complexity. The aftermath of the Covid-19 pandemic has resulted in a scarcity of late-stage funding, reflecting investor hesitancy driven by widespread losses and significant layoffs across various startups. The prevailing funding climate has created a challenging environment for companies seeking financial backing, further influencing OYO’s strategic decision to withdraw its IPO application.

OYO’s pause on its IPO journey throws a spotlight on the broader challenges faced by new-age companies seeking public listings. Investors are increasingly demanding sustained profitability and clear paths to sustainable growth. This raises an intriguing question: Will this be a temporary retreat for OYO to regroup and emerge stronger, or a sign of deeper challenges that could alter its trajectory altogether?

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The Role of AI in Redefining Mobile Banking Experiences

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mobile banking and AI

Have you ever wondered how your mobile banking app seems to understand your financial needs almost as well as you do? 

In a world where technology and finance converge, Artificial Intelligence (AI) has emerged as the wizard behind the curtain, reshaping our mobile banking experiences. 

This article explores AI’s multifaceted impact, not just as a tool but as a transformative force reshaping on-the-go financial management.

Personalization and Customer Experience

AI algorithms leverage advanced analytics to meticulously analyze user behavior, transaction history, and engagement patterns. As reported by McKinsey, this data-driven approach enables banks to gain profound insights into each user’s unique needs and preferences. For instance, if a user frequently engages in online shopping, AI can recognize this pattern and offer tailored suggestions or discounts for relevant products or services.

The power of AI in personalization becomes most apparent in the tailored recommendations and insights it provides. Whether it’s suggesting budget-friendly alternatives, highlighting potential investment opportunities, or advising on debt management, AI-driven systems are adept at offering personalized financial guidance. 

For example, suppose a user frequently makes joint purchases or has expressed interest in collaborative financial endeavors. In that case, the AI might recommend how to open a joint bank account online for streamlined financial management.

The intersection of personalization and AI significantly contributes to enhanced user engagement. Mobile banking becomes more intuitive and user-centric by tailoring the user interface, notifications, and alerts to individual preferences.

Fraud Detection and Security

AI-driven algorithms have proven to be invaluable in the fight against fraud by providing real-time threat analysis. 

According to Forbes, these algorithms continuously monitor user transactions, flagging deviations from established patterns. Analyzing massive datasets in real-time enables swift identification of suspicious activities, allowing for prompt intervention and mitigation of potential threats.

Moreover, AI plays a crucial role in bolstering customer verification processes, effectively reducing the threats posed by identity theft and preventing unauthorized access.

Advanced facial recognition and voice biometrics, powered by AI, offer a more secure means of authentication. These technologies bolster security and streamline the user authentication experience, striking a balance between robust protection and user convenience.

A notable strength of AI in fraud detection is its capability to continually learn and adapt to the ever-evolving landscape of threats. This adaptability ensures that mobile banking security measures remain robust and effective in the face of ever-changing cyber threats.

Chatbots and Virtual Assistants

A key advantage of AI-driven chatbots is their ability to provide instantaneous assistance. No widner, over Users can now get real-time answers to their queries, ranging from simple balance inquiries to complex financial planning advice. 

Immediate access enhances customer satisfaction; no more waiting in queues or navigating phone menus.

Plus, chatbots and virtual assistants don’t sleep. Their round-the-clock availability ensures that users can access banking services and support anytime, transcending traditional banking hours. This accessibility aligns with the evolving needs of a global and digitally connected society, allowing users to manage their finances on their schedule.

Predictive Analytics for Financial Planning

AI-driven predictive analytics delve deep into individual spending patterns. By scrutinizing transaction histories, these algorithms identify recurring expenses, irregularities, and trends in user behavior. This granular understanding enables mobile banking platforms to provide users with real-time insights into financial habits, fostering a more conscientious approach to spending.

Predictive analytics in financial planning extend beyond day-to-day expenses. According to a study, AI algorithms can help users set and achieve financial goals. 

Whether saving for a vacation, a major purchase, or retirement, the system can analyze income, spending habits, and market conditions to provide actionable steps toward realizing these goals. This feature transforms mobile banking from a mere transactional tool into a holistic financial planning companion.

In a world of economic uncertainties, predictive analytics are crucial for users to adapt to changes in the financial landscape. For instance, during economic downturns, AI algorithms can analyze individual financial positions and recommend adjustments to spending or investment strategies, ensuring users are better equipped to navigate challenging economic conditions.

Automation for Efficiency

AI-driven automation is transforming the financial industry by automating back-office processes and repetitive tasks that were traditionally time-consuming. In mobile banking, this translates to faster and more accurate execution of operations. Moreover, statistical data showcases an impressive 40% boost in efficiency, coupled with a substantial 30% reduction in operational costs.

As AI keeps evolving, you can expect the scope of automation in mobile banking to expand further. This benefits financial institutions by reducing operational expenses and allows them to redirect resources toward more strategic and customer-centric initiatives.

From personalized services to enhanced security measures, the impact of AI is felt across various facets of the financial industry. The insights highlighted in this article underscore the data-driven evolution of mobile banking, emphasizing the pivotal role of AI in shaping a more user-centric and secure financial landscape.

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Over 54% of All Smartphones Shipped in India During 2023 Were 5G Enabled: Budget-Minded Consumers Fuel the Growth

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5G smartphone shipments in India

The demand for 5G smartphones in India has dramatically increased in recent years, with a plethora of new launches in 2023. Interestingly, the country shipped 79 million units of 5G smartphones in 2023, representing a whopping 54.1% of the total shipments during the year.

In the broader context of India’s smartphone market, the overall shipments reached 146 million smartphones in 2023, with a nominal 1% YoY growth, according to the latest data from International Data Corporation (IDC). Notably, the second half of 2023 showcased impressive momentum, witnessing an 11% YoY growth in smartphone shipments. This robust performance in the latter part of the year effectively compensated for the sharp decline of 10% YoY recorded in the first half.

More specifically, the holiday quarter accounted for more than 25% of India’s total smartphone shipments in 2023, totalling 37 million units. The shipments in Q4 2023 increased a phenomenal 26% YoY.

Surge in Demand for 5G Smartphones in India

India is fast moving towards a premiumization trend in the smartphone sector. The Average Selling Price (ASP) of smartphones surged 14% YoY to a record of US$255 in 2023. Notably, this was the third consecutive year of double-digit growth in ASP, which has posed a constraint on the overall recovery of the smartphone market.

The rise in smartphone ASP in India is primarily fueled by the growing demand for premium smartphones priced above US$600+, resulting in an increased share of the premium segment from just 6% in 2022 to 10% in 2023. Additionally, the rapid adoption of 5G smartphones in India played a pivotal role, accounting for a record 54% share of the total market.

However, 5G smartphones are no longer about the premium that is perceived as out of reach. In a noteworthy shift, the average selling price of 5G smartphones in India dropped 5% YoY in 2023 to US$374. Within the 5G category, the share of the mass budget (US$100<US200) segment increased to 35% in 2023 from 22% in 2022, while the entry-premium (US$200<US$400) segment maintained its dominance, albeit with a reduced share of 38% in 2023, down from 49% in 2022. This evolving market trend underscores the industry’s commitment to making advanced technologies, including 5G, more inclusive and accessible for a wider range of consumers in India.

Apple iPhone 13 and iPhone 14, Samsung Galaxy A14, Vivo T2x and Xiaomi Redmi12 were India’s highest-shipped 5G smartphones in 2023.

In India’s premium smartphone category, close to a million foldable phones were shipped in 2023, with the ASP declining 4% YoY to US$1,236. Samsung maintained its dominant position in the foldable phone market with a whopping 73% market share in 2023.

On the other hand, India’s feature phone segment resurged in 2023 after four consecutive years of declining shipments. The country shipped 61 million units of feature phones last year, with 8% YoY growth.

“Most brands chose to reduce prices and offer additional channel margins in the last quarter to manage the inventory levels from post festive cyclic dip. This will give a lukewarm start to 2024 with cautious stocking by the channels,” said Upasana Joshi, Research Manager, Client Devices, IDC India.

Key Highlights: India Smartphone Shipments 2023

  • Smartphone shipments through online channels in India fell 6% YoY in 2023, with the share falling to 49% from 53% in 2022.
  • Offline channel smartphone shipments in India grew 8% YoY in 2023. This growth can be attributed to vendors bolstering their retail presence with lucrative premium offerings and expanding their reach into smaller towns and cities.
  • India’s entry-level smartphone segment (sub-US$100) grew 12% YoY in 2023, accounting for a significant 20% share of the total smartphone market. Xiaomi maintained its leading position in this segment, with POCO and Samsung following closely as the second and third leading brands, respectively.
  • The share of the mass budget smartphone segment (US$100<US$200) declined to 44% in 2023 from 51% in 2022. This was mainly due to the 12% YoY decline in shipments during the period. vivo, Realme and Samsung together accounted for 53% of the total shipments within this segment.
  • The entry-premium segment (US$200<US$400) accounted for a 21% share of the total smartphone market in India in 2023. Interestingly, Vivo and OnePlus collectively dominated this price segment, contributing to almost 40% of the overall shipments.
  • The shipments in the mid-premium smartphone segment (US$400<US$600) increased 27% YoY in 2023. The segment accounted for a 5% share of India’s total smartphone market. OnePlus is leading with a 35% share, followed by Samsung and Vivo.
  • Shipments in India’s premium segment (US$600<US$800) grew 23% YoY in 2023, propelled by iPhone 13, Galaxy S23/S23 FE, and OnePlus 11. This segment secured a 3% share of the total smartphone market.
  • The super-premium segment (US$800+) registered the highest growth of 86% YoY in shipments during 2023. This surge led to an increased market share, reaching 7%, compared to 4% in 2022. Apple dominated the super-premium segment with an overwhelming 68% share, while Samsung secured the second position with a notable 30% share.

India’s smartphone market has witnessed a period of either decline or stagnation in terms of shipments following the Covid-19 pandemic. Looking forward to 2024, the market is expected to show a flat to low single-digit annual growth. This growth trajectory is anticipated to be primarily steered by upgraders in the (US$200<US$400) segment, supported by financing schemes, extended warranties, and upgrade programs. Apple is capitalizing on the premiumization trend, while the Android market is bustling with diverse players introducing competitive offerings such as 5G and foldable devices to entice Indian consumers.

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Paytm Shares May Plunge to Rs 275 As Brokerage Firms Forecast Bleak Future

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Paytm Shares down

Paytm, once anticipated to be India’s most successful IPO in corporate history, is currently grappling with a substantial downturn in its market performance. Today, on February 13, 2024, the fintech company’s stock declined 10%, reaching a historic low of Rs 380. The drop in Paytm shares appears to be more concerning when compared with its listing price of Rs 1,560.8 on November 18, 2021. It’s a massive 75.6% decrease!

The fall in the shares of One97 Communications Ltd (NSE: PAYTM), Paytm’s parent company, is a direct reflection of the market’s response to the recent ban on Paytm Payments Bank’s services. As a result, Macquarie, a prominent global brokerage firm, has adjusted its assessment of Paytm, downgrading its rating from “neutral” to “underperform,” along with a revised target price potentially as low as Rs 275. The firm cites a change in methodology, shifting from price/sales to fair value on normalized distribution business profits.

“We change our methodology from price/sales to fair value on normalised distribution business profits. We revise our target price to Rs 275 from Rs 650. Our valuation would have been Rs 225 under our earlier methodology,” said Macquarie’s Suresh Ganapathy.

Gloomy Outlook for Paytm

The ban on Paytm Payments Bank has triggered operational challenges, requiring the migration of customers and merchants to new third-party banks. The added complexity arises from the necessity for fresh KYC (Know Your Customer) procedures for all involved parties. This migration process must be accomplished within a tight deadline, February 29, 2024, set by the Reserve Bank of India (RBI). This could lead to widespread customer loss and a significant drop in revenue.

According to the Macquarie analysts, their channel checks revealed that some lending partners are reassessing their ties with Paytm. If they scale down or terminate partnerships, Paytm’s lending business revenue will drastically decline. This poses a substantial threat to Paytm’s monetization strategy and casts uncertainty on the fundamental viability of its business model.

It is important to note that AB Capital, a prominent lending partner of Paytm, has already decreased its involvement with Paytm’s Buy Now, Pay Later (BNPL) services. The exposure, which was once at a peak of Rs 20 billion, has now been reduced to just Rs 6 billion, and it is expected to decrease even more in the future.

The Macquarie analysts project a potential 60-65% decline in revenues for One97 Communications due to lower payments and distribution income, further fueling investor anxieties.

Adding to the fire, Macquarie also increased its loss estimates for Paytm’s Parent by a staggering 170%/40% over FY25/26.

A Bull vs Bear Battle: Who Will Win?

In an optimistic “bull-case scenario,” Paytm stocks are anticipated to experience a rally, potentially reaching up to Rs 540. This positive projection takes into account a relatively moderate decline of 25% in distribution revenues compared to the baseline scenario, which assumes a more significant 60-65% reduction.

On the other hand, in the more pessimistic “bear-case scenario,” the Paytm shares are predicted to plummet to as low as Rs 180. This substantial decline is contingent on a more severe decline in the company’s distribution revenues, estimated to be as much as 75%.

RBI Governor Shaktikanta Das’s recent statement, “hardly any room to review” the ban on Paytm Payments Bank, further dampens investors’ hopes. Paytm shares have already lost 50% of their value since the January 31st ban, leading market experts to advise retail investors to stay clear until the regulatory clouds disperse.

However, amidst the bleak outlook painted by Macquarie, a contrasting perspective surfaces from global broking firm Bernstein. Their “buy the dip” strategy suggests a glimmer of hope, urging investors to consider the current downturn as a potential buying opportunity. Their target price of Rs 600 expresses confidence in Paytm’s ability to recover, offering a stark contrast to Macquarie’s prediction of a potential crash.

What are your thoughts on the RBI’s ban on Paytm Payments Bank? Do you think One97 Communications, under the leadership of Vijay Shekhar Sharma, will successfully address all compliance issues, leading to a potential recovery in Paytm shares? Let us know in the comment section below!

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Most Valued Indian Companies 2023: Policy Bazaar and Zomato Take the Crown as Fastest-Growing Listed Unicorns

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Top 10 Most Valued Indian Companies 2023

The Indian corporate sector has undergone a dynamic transformation in recent years, with established industry leaders maintaining their dominance while innovative newcomers leave their mark. The latest Burgundy Private Hurun India 500 list presents an interesting data-driven perspective on the growth in the value of Indian enterprises in 2023. The cumulative value of the top 10 companies in India amounted to INR 73.3 lakh crore (US$882 billion) in 2023, remaining unchanged compared to the previous year.

However, over the last decade, the total value of India’s top 10 most valuable enterprises has witnessed a remarkable surge, soaring by an impressive 165%. What’s more interesting is that eight of these companies have consistently maintained their positions in the top 10 rankings for both the last 5 and 10 years.

Reliance Industries continues to be India’s most valuable company for the third consecutive year on the Burgundy Private Hurun India 500 in 2023, with a value of INR 15.6 lakh crore. Following closely are Tata Consultancy Services (TCS) at INR 12.4 lakh crore and HDFC Bank at INR 11.3 lakh crore.

In 2023, HDFC Bank, Larsen & Toubro, and ITC emerged as the most significant gainers in terms of absolute value change, experiencing substantial increases of INR 2,92,319 crore, INR 1,17,946 crore, and INR 1,04,452 crore, respectively. On the other hand, when considering percentage gains, Suzlon Energy (436%), Jindal Stainless (395%), and JSW Infrastructure (310%) stood out as the most noteworthy performers, highlighting their impressive growth rates during the same period.

Value of Listed Indian Unicorns

The Indian startup ecosystem witnessed a remarkable turnaround in 2023 as the combined value of the six unicorns listed on the stock exchange reached INR 262,958 crore, with an increase of INR 62,837 crores. This was a sharp improvement compared to the valuation loss of INR 166,013 crores in 2022.

  • Zomato saw an impressive 76.2% YoY increase in its value, reaching INR 92,670 crore in 2023.
  • Paytm demonstrated commendable growth with a 41.4% YoY increase, securing a total valuation of INR 58,527 crore in 2023.
  • Nykaa, however, experienced a decline of 26.8% YoY in its value, settling at INR 40,009 crore in 2023.
  • Policy Bazaar witnessed a string 83.2% YoY gain in its value to INR 31,792 crore in 2023.
  • Delhivery recorded a solid 23.4% YoY growth in its value, reaching INR 30,832 crore in 2023.
  • Honasa Consumer, the parent of Mamaearth, witnessed a modest 0.3% YoY increase in its valuation, amounting to a total of INR 9,128 crore in 2023.

The 2023 Burgundy Private Hurun India 500 represents a diverse array of companies spanning 16 states, with Maharashtra, Karnataka, Tamil Nadu, and Delhi emerging as the primary contributors to this prestigious ranking.

In terms of urban distribution, Mumbai takes the lead with a notable presence of 156 companies, boasting an impressive cumulative valuation of INR 1,12,90,152 crore. Following suit, Bengaluru hosts 59 companies with a combined valuation of INR 21,75,545 crore, while New Delhi accommodates 39 companies, collectively valued at INR 14,90,003 crore in 2023.

What adds a distinctive dimension to these top-performing companies is their intriguing age profile, showcasing a rich historical tapestry. The average age of the 2023 Burgundy Private Hurun India 500 stands at an impressive 38 years, underlining the enduring legacy of these enterprises.

Impressively, 21 companies carry a heritage of over a century, with the distinction of EID-Parry (India) as the oldest, established over 200 years ago. On the other end of the spectrum, the list embraces a powerful 153 companies founded in this millennium (from the year 2000 onwards), 52 of which are less than a decade old. Notable entrants in this youthful category include GlobalBees, Mensa Brands, Zepto, Motherson Sumi Wiring India, Apna, and CRED. This harmonious coexistence of established enterprises and innovative startups paints a vibrant and comprehensive picture of India’s diverse business landscape encapsulated in the Burgundy Private Hurun India 500.

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Mounting Challenges for Paytm: RBI Maintains Grip, “No Room for Review” on Banking Curbs

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no review on Paytm Payments Bank

Challenges continue to mount for Paytm, India’s fintech giant, with no immediate relief in sight. Despite the company’s attempts to appease the Reserve Bank of India (RBI), Governor Shaktikanta Das has declared “hardly any room for review” regarding the recent curbs placed on its banking unit, Paytm Payments Bank. This leaves Paytm’s future hanging in the balance, amidst questions about its compliance and potential license revocation.

Speaking to reporters in Delhi on Monday, Das underlined the gravity of the situation and hinted at stringent actions ahead.

The crux of the issue lies in the RBI’s concerns about “persistent non-compliance” by Paytm Payments Bank, particularly regarding “questionable transactions” between the bank and the widely used payment app. Despite multiple warnings and two years of regulatory scrutiny, Paytm seems to have fallen short of the RBI’s standards. Governor Das emphasized the thorough assessment undertaken before taking action, suggesting the company’s attempts at appeasement, including the recent establishment of a compliance committee, might be falling on deaf ears.

The central bank is expected to release more details in upcoming FAQs (Frequently Asked Questions), but its firm stance suggests no immediate relief for Paytm.

“When constructive engagement doesn’t work or when the regulated entity does not take effective action, we go for imposing business restrictions. Actions are proportionate to the gravity of the situation,” said Shaktikanta Das.

Bloomberg reports that the RBI might revoke Paytm’s banking license as early as March. This would be a major blow, potentially impacting millions of users and raising concerns about the company’s long-term viability.

Though specifics remain unclear, the RBI deputy governor assures “suitable steps” to minimize customer inconvenience. This could involve facilitating transfers to other banks or ensuring smooth operations till an alternative is found.

Paytm’s Defense

Paytm has not completely ruled out the possibility of redeeming itself. The recently established compliance committee, comprising renowned personalities, is a step in the right direction to address the RBI’s concerns. Meleveetil Damodaran, a seasoned financial expert and former head of the Securities Exchange Board of India (SEBI), will spearhead the advisory committee. The three-member panel also includes Mukund Manohar Chitale, a former president of the Institute of Chartered Accountants of India (ICAI), and Ramachandran Rajaraman, a former Chairman and Managing Director of Andhra Bank.

In addition to these developments, One97 Communications has already announced its plans to expand its partnership with third-party banks, aiming to sustain and extend its range of banking services.

Regaining the RBI’s trust and securing customer confidence is paramount for One97 Communications (NSE: PAYTM) in its ongoing operation of Paytm and associated banking services in India. Investors are likely to remain cautious, awaiting further developments. This saga involving the RBI ban on Paytm Payments Bank highlights the importance of stringent compliance for fintech companies operating in a highly regulated environment.

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Apple Accounted For 50% of the Global Smartphone Revenues in 2023: Is Premiumization Leaving Android Behind?

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Apple revenue share in global smartphone market

As the average selling price (ASP) for smartphones has increased over the years, so has the revenue booked by Original Equipment Manufacturers (OEMs) worldwide. Not surprisingly, Apple, known for consistently launching the most expensive iPhone models, has maintained its stronghold on the lion’s share of the global smartphone market revenues each year.

According to Counterpoint Research’s latest report, the average selling price of smartphones globally reached $350 for the first time in 2023, with 2% YoY growth. Despite this positive ASP trend, the overall global smartphone revenues dipped 2% YoY, reaching just under $410 billion by the end of 2023. This decline was attributed to a 4% YoY drop in shipments, totalling 1.17 billion units over the past year.

Absurd Rise of High-End Smartphones

Interestingly, Apple made a historic milestone by emerging as the undisputed market leader in terms of both worldwide smartphone shipments and revenues in 2023. The Cupertino giant secured a 20.1% share of the global smartphone market in terms of shipments and an impressive 50% share of global smartphone revenues in 2023.

It is important to note that Apple’s increasing market share in revenues aligns seamlessly with the prevailing trend of “premiumization.” An astonishing 25% of smartphones shipped worldwide in 2023 had price tags above $600. The premium smartphone category saw an 8% YoY growth, showcasing the increasing appetite among consumers for top-tier devices. In stark contrast, the non-premium segment faced double-digit declines, underscoring a clear shift in consumer preferences towards more advanced and feature-rich options.

The surge in the global premium smartphone segment in 2023 can be attributed to several factors propelling its growth, including the rising popularity of foldable designs, the integration of cutting-edge features like GenAI, and the undeniable influence wielded by Apple in shaping consumer preferences within the premium segment. Apple’s commitment to innovation and its ability to set industry standards have evidently played a pivotal role in steering the premiumization trend.

Other Highlights: Revenue Share by OEMs

  • The ASP of Apple iPhones surged an impressive 17.7%, from $756 in 2018 to a record high of $890 in 2023, showcasing a robust presence in the premium and ultra-premium smartphone segments on a global scale.
  • Between 2018 and 2023, Apple has witnessed a substantial 31.6% growth in its global smartphone revenue share, increasing from 38% to 50%.
  • Apple accounted for 7 of the top 10 smartphones shipped worldwide in 2023. The other 3 were Samsung devices, according to Canalys.
  • Samsung’s revenue share in the global smartphone market revenue share declined from 18% in 2018 to 16% in 2023. This was mainly due to the fierce competition from Apple in the premium market, rivalry with Xiaomi and vivo in the mid-tier segment, particularly in India, and challenges from Transsion Group in MEA and South East Asia (SEA) in the lower-end segment.
  • The average selling price of Samsung smartphones increased by $36, from $252 in 2018 to $288 in 2023.
  • The ASP of Xiaomi smartphones rose from $150 in 2018 to $160 in 2023, leading to a corresponding increase in global revenue share from 4% to 6% over the same period.
  • The average selling price of Oppo smartphones decreased by $5, from $261 in 2018 to $256 in 2023. This change contributed to a decrease in Oppo’s revenue share in the global smartphone market, falling from 8% to 7% during the same period.
  • Vivo suffered the most among the top five players, with a notable $43 decline in its average selling price for smartphones worldwide over the last five years. The ASP dropped from $247 in 2018 to $204 in 2023. As a result, Vivo’s share of global smartphone revenues decreased to 4% in 2023, down from 6% in 2018.

The world is witnessing a remarkable transformation in the habits and buying behaviour of smartphone users worldwide. This is evident in the rise of the average selling prices (ASPs) of smartphones and the heightened demand for high-end devices such as iPhones. This shift is partly attributed to the availability of improved financing options offered by e-commerce companies. Consequently, consumers are willing to invest more in premium smartphones, which are beyond just traditional communication. It would be interesting to see how Samsung and other Andriod OEMs leverage these changing dynamics to capitalize on the market, much like Apple has adeptly done.

With Apple capturing 50% of global smartphone revenue in 2023, is the shift towards premiumization squeezing out Android manufacturers? Let us know in the comment section below!

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Paytm Stock Crashes to All-Time Low Since Listing: Analysts Predict Long-Term Pain

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Paytm Shares

Following the RBI’s ban on Paytm Payments Bank’s services, the share of One 97 Communications fell another 10% on Monday, February 5, 2024, settling at an all-time low at Rs 438.5 since listing. The regulatory challenges intensified with allegations of money laundering, prompting an investigation by the Directorate of Enforcement (ED). However, the fintech firm has firmly denied any such ongoing investigations.

“Neither the company nor its founder and CEO are being investigated by the Enforcement Directorate regarding, among other things, money laundering,” In a recent clarification issued, Paytm stated.

Since the RBI’s announcement on the evening of January 31st, Paytm shares have consistently experienced a decline. Notably, in the last three trading sessions, the stock has dropped by a significant 42.4% of its value, equivalent to a massive loss of Rs 20,500 crore in market capitalization.

Rajesh Palviya, a market expert from Axis Securities, advises against engaging in bottom fishing, underscoring that the market has yet to fully assimilate the ongoing developments.

Brokerages, initially optimistic about Paytm’s path to profitability after the IPO fiasco and listing crash, have now turned vocal in advocating sell positions.

Paytm Payments Bank Limited (PPBL), in which One97 Communications holds a 49% ownership stake, has received a directive from the Reserve Bank of India (RBI) to halt most of its operating functions, including deposits, PPI (Prepaid Payment Instruments), wallets, Fastag, BBPOU (Business Correspondent), and UPI (Unified Payments Interface). The deadline for compliance with these measures is set for the end of February 29, 2024. Additionally, the RBI has instructed PPBL to refrain from engaging with Paytm’s other business units for Nodal accounts.

The RBI’s action against Paytm Payments Bank is a response to reported instances of non-compliance and supervisory concerns.

Macquarie’s Perspective

Macquarie, one of the biggest financial services companies, has shared its perspective on the challenges faced by Paytm. According to Macquarie, the RBI’s recent ban on Paytm Payments Bank could have significant repercussions on the company’s overall revenue and profitability in the medium to long term. Suresh Ganapathy from Macquarie emphasized these severe restrictions could hinder Paytm’s ability to retain customers and limit its capacity to sell payment products and loan products.

Macquarie has drawn a comparison with a previous situation involving the largest private sector bank, highlighting that the RBI took 15 months to lift the ban on its digital business activities. In contrast, in Paytm’s case, the initial ban in March 2022 for onboarding new customers occurred 22 months ago. During this period, the RBI conducted a comprehensive IT audit and continued identifying non-compliance, indicating significant lapses.

The analysis from Macquarie implies that there may not be a near-term solution to Paytm’s regulatory challenges, potentially leading to the indirect revocation of Paytm’s Prepaid Instrument (PPI) license by the RBI. Macquarie also raised concerns about Paytm’s relationship with the regulator, suggesting that their lending partners might reconsider their relationships going forward.

It’s important to note that Macquarie made these assessments without direct interactions with Paytm’s management, and the views are based solely on their interpretation of the RBI’s actions and the available information.

Analysts at Jefferies also caution that the impact on Paytm’s business extends beyond regulatory issues. They highlight reputational concerns related to governance and compliance and anticipate challenges in the lending business. Despite management’s guidance of a potential EBITDA impact of Rs 300-500 crore (20-30% of FY25 earnings), Jefferies suggests a higher hit of 45%, factoring in an additional 20% impact from a sustained lending business slowdown.

In response, Paytm has officially announced its intent to strengthen its relationships with prominent third-party banks. This move aims to expand the distribution of payments and financial services products to Paytm’s customer base.

Meanwhile, amidst the crisis, shares of Jio Financial Services (NSE: JIOFIN) surged 14.6% on Monday, trading at ₹290.95, following reports that One 97 Communications is in talks with Jio and HDFC Bank to sell its wallet business.

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