Sebi eases Esop rules; VCs chase secured credit

Sebi eases Esop rules; VCs chase secured credit
Also in the letter:
Sebi relaxes Esop norms for IPO-bound startup founders
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Quick recap:
Also Read:
But why:
VCs back fintechs entering secured credit amid unsecured lending slowdown
Driving the news:
Vridhi Home Finance, Basic Home Loans, and Easy Home Finance have all raised venture rounds over the past year.
Techfino and Mahaveer Finance (as we are reporting today) have secured equity funding from marquee investors.
MSME-focused Loantap also closed a fresh round recently.
Carving out a niche:
Improving operational efficiency through technology
Applying tech-enabled underwriting even when property inspections are required
Leveraging government digital databases for land and property records
The catch:
NBFC-style businesses require consistent and sustainable growth, which often clashes with typical VC growth expectations.
LAP products may seem attractive, but the segment has historically experienced non-performing assets (NPAs).
Fintechs entering the space will need strong collection infrastructure to stay resilient.
Mahaveer Finance raises Rs 200 crore
Byju's RP alleges asset diversion by former directors
Details:
$533 million allegedly moved to related entities via a US subsidiary
Rs 130 crore transferred to an Indian unit
RP Shailendra Ajmera has asked the NCLT to hold directors accountable
In response, Riju Raveendran has challenged Ajmera's role citing conflict of interest
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Charges levelled:
Counter:
Deeptech VCs rev up fundraising efforts
Driving the news:
Java Capital is increasing its fund size from Rs 50 crore to Rs 240 crore.
Bharat Innovation Fund (BIF) is eyeing $150 million for its second round
Ideaspring Capital and Mela Ventures are in the market with their third and second funds, respectively
Navam Capital is raising its debut fund of $30 million.
Other Top Stories By Our Reporters
Insolvency plea filed against FirstCry subsidiary GlobalBees:
Karnataka to survey AI impact on workforce:
Ola drivers across India can keep entire fare earnings:
Global Picks We Are Reading
The markets regulator has relaxed Esop rules for founders preparing to take their companies public. This and more in today's ETtech Morning Dispatch.■ Urban Company swings to profit■ Deeptech VCs rev up fundraise■ Insolvency trouble for FirstCryIndia's markets regulator, the Securities and Exchange Board of India (Sebi), has eased rules for startup founders on retaining their employee stock options (Esops) as they take their companies public.Founders can now retain Esops granted at least a year before filing the draft red herring prospectus (DRHP). These stock options may continue to be exercised even after the company lists, and the founders are classified as promoters, Sebi decided in its board meeting on Wednesday.When filing IPO papers, founders were regarded as promoters. Once the company was listed, they could no longer be granted Esops and had to liquidate any outstanding stock options before going public. Sebi acknowledged that this rule negatively impacted founders during the initial public offering (IPO) process.The relaxed norms are expected to help companies looking to list in India following a reverse flip Digital lending startups that once focused heavily on unsecured consumer credit are now transitioning towards secured lending , as the unsecured segment exhibits evident signs of a slowdown.Leading venture firms are doubling down on investments in home finance and secured credit platforms. These include products such as loans against property (LAP), mutual fund-backed credit, and other asset-based instruments.While traditional lenders continue to dominate the space, fintechs see opportunities to disrupt key areas:Despite strong investor interest, secured lending is not a natural match for venture capital. Most VC firms favour hyper-growth tech plays, while secured credit demands a different approach.Chennai-based non-bank lender Mahaveer Finance raised Rs 200 crore in its first venture funding round. Elevation Capital led the round, with participation from Banyan Tree Finance and First Bridge Capital.Byju Raveendran, founder, Byju'sByju's insolvency resolution professional (RP), backed by EY, has alleged that former directors are liable under IBC provisions for transactions that diverted company funds.Shailendra Ajmera, the RP of Byju's parent company, Think and Learn, claimed in lawsuits filed late April that two separate sets of transactions were detrimental to the company.Ajmera claimed Think and Learn was deprived of the money, which its directors Byju Raveendran, Riju Raveendran, and Divya Gokulnath, should have returned.In early April, Riju Raveendran approached the NCLT, claiming Ajmera should be removed as the RP of Think and Learn, citing conflict of interest.India's deeptech-focused venture capital funds are stepping up their fundraising efforts , as the ecosystem matures with growing government backing and favourable geopolitical trends.Deeptech investments in India doubled in the first four months of 2025, reaching $324 million across 35 deals. This compares to $156 million across 21 deals during the same period last year.(L-R), Supam Maheshwari and Nitin Agarwal, founders, GlobalBeesThe directors of the direct-to-consumer (D2C) homecare company Kuber Industries have filed an insolvency petition against GlobalBees Brands, a subsidiary of the omnichannel retailer FirstCry, concerning unpaid dues amounting to Rs 65 crore.The state government has invited responses from industry leaders, HR heads, technology practitioners, and academics on how they are using artificial intelligence (AI) in the workplace to identify skill gaps, emerging job roles, and the nature of workforce disruptions.Ride-hailing platform Ola has introduced a zero-commission model across India, allowing driver-partners of autos, bikes, and cabs to keep 100% of their fare earnings.■ This AI model never stops learning ( Wired ■ AI obituary pirates are exploiting our grief. I tracked one down to find out why ( CNET ■ India wants its own EV market, but needs China to get there ( Rest of World

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