Volatile markets keep tech IPOs on hold; K’taka moves SC on gaming law

Several Indian tech startups went public in 2021, including Zomato, Nykaa and Paytm, but this year markets have been less kind to their peers. A number of startups, including Delhivery, PharmEasy and Oyo, have had to postpone their IPO plans until the high volatility in global markets subsides.

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Also in this letter:
■ K’taka gov’t asks SC to reinstate ban on online gambling
■ Paytm gained users with cash back, not services: veteran banker
■ Games24x7 raises $75M and other deals closed

Indian startup IPOs remain on hold amid geopolitical headwinds

startup IPO

Amid high volatility in public markets, many top Indian startups have decided to postpone their IPO plans.

Delhitr suspended plans, partly due to market volatility.

“We want to go public when our business is well understood. Although valuation is one of the factors (causing the delay), it is not a critical factor as we do not need capital and market conditions are currently bumpy,” he said. -he declares.

Backed by SoftBank and Carlyle, Delhivery said in its Draft Red Herring Prospectus (DRHP) in November that it plans to raise Rs 5,000 by issuing new shares. The IPO will also include a sell offering in which existing investors will sell shares worth Rs 2,460 crore.

Who are the others ? Delhivery is not the only startup to have decided to postpone its IPO.

  • Mumbai-based API Holdings, which manages PharmEasy, is also uncertain about its IPO plans despite Sebi’s clearance last month. The company, which acquired diagnostics chain Thyrocare last year, originally planned to launch its Rs 6,250 crore issue this financial year.
  • As for companies such as Urban business, which was planning an IPO in the next 18 to 24 months, the focus has changed. “This year, we prefer to focus only on the business and continue to grow. When the markets turn neutral, we will reconsider (our IPO),” said Abhiraj Singh Bhal, its co-founder and managing director.

Watch the full roundtable at ETSA 2021 here.

Karnataka government asks Supreme Court to reinstate ban on online gambling

online game

The Karnataka government has moved the Supreme Court, challenging the High Court judgment that struck down some key amendments to the state’s Police Act 1963, which banned online “gambling”.

Catch up fast: The governor of Karnataka had notified the law on October 5, 2021 after the state legislature passed the bill in September.

But on February 14, the High Court declared the amendments unconstitutional. He said he was not striking down the entire law, only the parts of it that violated the Constitution.

The ruling came in response to written petitions from several gaming companies and the All India Gaming Federation (AIGF) challenging the law.

Government perspective: But the Karnataka government has told the Supreme Court that it needs such a law to prevent people from losing money in online gambling.

“We had changed the law because reports showed that the use of money to bet in online games had ruined a large number of young people and their families. We decided to impose restrictions to eliminate the use of money and responded with legislation,” the Karnataka Home Minister said. Araga Jnanendra told ET.

“But the court invalidated the amendments. We still think our answer was right, as many families said the threat of online betting destroyed them financially. That’s why we decided to move the Supreme Court,” he added.

Not the only state: Last year, Tamil Nadu also enacted an ordinance amending its Gambling and Police Act 2021, banning online gambling. The Madras High Court, however, struck down the amendments and declared the law unconstitutional.

Kerala had also banned online rummy under the Kerala Gaming Act, but that ban was also overturned by the High Court.

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Paytm gained users through cash back, not services, says veteran banker

Aditya Puri

Veteran banker Aditya Puri has raised questions about Paytm’s business model, saying the company won customers not by rendering services but through cash back.

Puri, who led HDFC Bank from its inception and made it the largest private lender when he retired in 2020, also questioned Paytm’s business model and lack of profits.

“Paytm… makes payments, when does [it] make a profit,” Puri asked at an event organized by Mumbai University’s IMC Chamber of Commerce.

The remarks come amid a steep decline in Paytm shares, which are now trading at 75% below the price at which investors bought them in the IPO. This is not the first time that Puri has made public his concerns about the business models of these companies.

Closed deals ETtech

Starter offers

■ Games24x7, a multi-game platform, raised $75 million in a funding round led by Malabar Investment. Existing backer Tiger Global also participated in the financing, which valued the company at $2.5 billion.

■ FarMart, a business-to-business food sourcing platform, raised $32 million (Rs 244 crore) in a funding round led by US venture capital fund General Catalyst, with backer participation. existing funds Matrix Partners India and Omidyar Network India.

■ OSlash, the enterprise software-as-a-service (SaaS) company, raised $5 million led by Indian and US entrepreneurs, including Kunal Shah, founder of Cred; Christian Oestlien, vice president of product at YouTube; Kevin Weil, president of Planet; Akshay Kothari, chief operating officer at Notion; and Cristina Cordova, partner at First Round Capital.

■ UK-based global investor Entrepreneur First (EF) has announced seed investments in six tech startups in India in its latest “Investor Reveal”. Amikus AI, Grabbit Live, Capitall, unScript AI, Coupl and FloWorks. EF has so far invested in 42 tech startups in India since its launch in 2019.

FBI Says Russian Hackers Are a ‘Current’ Threat to US Energy Systems

Cyber ​​attack

Russian hackers have scanned the systems of energy companies and other critical infrastructure in the United States, and state-sponsored hacking by Russia poses a “current” threat to US national security, a senior US official has said. FBI to lawmakers.

“The threat from Russia in a criminal sense, in a nation-state sense, is very, very real — and present,” Bryan Vorndran, deputy director of the FBI’s Cyber ​​Division, said in a hearing before a court. panel of the United States House of Representatives.

He added that “instances of Russian sweep networks” in the US energy sector have increased recently, and that such activity represents a “scouting phase” by Russia to try to understand the defenses of a company and whether it has vulnerabilities that could be exploited.

Facebook advertisers can sue the platform as a class: Meanwhile, a US judge has ruled that a lawsuit accusing Facebook of misleading advertisers on its “potential reach” tool can proceed as a class action. The ruling potentially allows millions of individuals and businesses who have paid for ads on Facebook and Instagram since August 15, 2014 to sue as a class.

Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai. Graphics and illustrations by Rahul Awasthi.

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