China's rare earth curbs hit India; Groww eyes bonds
China's rare earth export controls are concerning Indian electronic manufacturers. This and more in today's ETtech Top 5.
Also in the letter: ■ IT stocks tank■ Explained: Sebi's new Esop norms■ Microsoft vs OpenAI
Alarms ring at speaker, wearables, TV makers on Chinese rare earth squeeze
China's curbs on rare earth exports have set off alarm bells across the electronics industry, with speaker, wearable, and television manufacturers warning of looming shortages of permanent magnets. Production could grind to a halt unless supplies resume, industry executives and associations said.
Driving the news: Of the seven rare earth metals now under export curbs, terbium and dysprosium are essential for making neodymium-iron-boron (NdFeB) magnets.
These magnets are widely used in high-performance, portable and compact audio products.
They typically account for 5–7% of the bill of materials, and Indian electronics makers remain almost entirely dependent on Chinese imports, according to a white paper by the Electronics Industries Association of India (ELCINA).
Current state: China is holding back shipments of these magnets and related products at its ports, demanding end-use declarations before allowing export.
This has disrupted operations at speaker assembly units in India and caused delays in deliveries to local TV and audio brands, according to ELCINA.
To navigate the bottleneck, speaker manufacturers and importers have sought government help to secure end-use certificates, which Chinese exporters now require to obtain export licences, backed by full traceability documentation.
Tell me more: Alternative sourcing from Japan, Vietnam, or even recycled magnets within India comes at a steep cost. ELCINA's price analysis shows these options nearly double input costs, with supply remaining patchy and unreliable.
Also Read: G-7 eyes rare earth action plan as China's magnet control raises alarm
Groww looks to offer trading in corporate bonds, to apply for Sebi licence
(L-R) Harsh Jain, Neeraj Singh, Lalit Keshre and Ishan Bansal, founders, Groww
Online stockbroker Groww is planning to expand its mobile app to include trading in corporate bonds.
Driving the news: The Bengaluru-based firm plans to apply for an Online Bond Platform Provider (OBPP) licence, sources told us. While it already facilitates the primary sale of newly listed corporate bonds, it aims to offer secondary trading once it secures regulatory approval.
Significance: The OBPP licence will allow Groww to compete with platforms such as Wint Wealth and Grip Invest.
It also positions the company to tap into India's underpenetrated bond distribution market, where retail participation has been steadily growing.
That said, recent concerns around issuers like BluSmart have shaken confidence in the space.
Expansion bid: With an initial public offering (IPO) on the horizon, Groww is steadily diversifying beyond stockbroking.
It recently entered the credit space after receiving a non-banking finance company (NBFC) licence from the Reserve Bank of India (RBI).
The firm has expanded into wealth management with its acquisition of Fisdom and began offering margin trade funding to investors last year.
Background: In May, Groww confidentially filed its draft red herring prospectus with Sebi, aiming to raise between $700 million and $1 billion.
The company recently raised $250 million in a funding round led by GIC, which valued it at $6.5 billion. For FY25, it reported total revenue of Rs 4,056 crore and a net profit of Rs 1,819 crore.
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IT stocks slip up to 3.5% after Fed holds rates, flags persistent inflation
Indian IT stocks slipped in Thursday's trade after the US Federal Reserve kept interest rates unchanged, with LTIMindtree and Tech Mahindra leading the losses.
What happened: The Fed held its benchmark rate steady at 4.25% to 4.5%, citing ongoing inflation concerns and a cautious economic outlook. This marks the sixth consecutive meeting without a rate change. However, the latest 'dot plot'— a chart that reflects individual policymakers' forecasts—shows policymakers still expect two cuts in 2025.
Big losers: Here's how major IT firms reacted: LTIMindtree: Dropped 3.5% intraday, closed 1.6% lower.
Tech Mahindra: Fell nearly 3%, closed down about 2%.
The Nifty IT index slipped 1.4%.
Infosys also slipped, closing down about 0.1%.
Mid-sized firms, including Persistent Systems, Coforge, and Mphasis, declined between 1% and 2.6%.
Why this matters: The Fed's cautious stance raises uncertainty around US growth and inflation. For Indian IT firms, which derive significant revenue from US clients, this could dampen client spending and contract pipelines.
Explained: Sebi's new Esop norms for IPO-bound startup founders, reverse-flipping
The Securities and Exchange Board of India (Sebi) has approved several measures to ease doing business, including a long-awaited change for startup founders.
What's the news: The market regulator will allow startup founders to retain their employee stock options (Esops) even after their companies go public. Old rules: Founders were classified as 'promoters' at the time of initial public offering (IPO) filings, which barred them from holding or being granted Esops. If they held any, they had to liquidate them.
Founders were classified as 'promoters' at the time of initial public offering (IPO) filings, which barred them from holding or being granted Esops. If they held any, they had to liquidate them. New norms: Founders who received Esops at least one year before filing the draft red herring prospectus (DRHP) can now retain them post-listing.
Founders who received Esops at least one year before filing the draft red herring prospectus (DRHP) can now retain them post-listing. Flipback: Sebi will now also permit equity shares resulting from the conversion of Compulsorily Convertible Securities (CCS) to be included in an Offer for Sale (OFS), facilitating capital raising through public issues.
About time: Sebi has recognised past regulatory grey areas. Founders have long argued that the rules were unfair, often forcing them to exit early and miss out on long-term value creation.
Microsoft prepared to abandon high-stakes talks with OpenAI
OpenAI CEO Sam Altman with Microsoft CEO Satya Nadella
Microsoft is prepared to step back from 'high-stakes' talks with OpenAI over the future of their alliance, the Financial Times reported on Wednesday.
Driving the news: The tech giant is reportedly considering pausing negotiations if the parties cannot reach an agreement on key issues, including the size of Microsoft's future stake in OpenAI.
For now, Microsoft plans to lean on its existing commercial deal, which gives it access to OpenAI's technology through 2030, the FT report added.
Meanwhile: OpenAI executives have discussed accusing Microsoft of anticompetitive behaviour, the Wall Street Journal reported on Monday. The two companies are also renegotiating the terms of Microsoft's investment, including its future equity position in the AI firm.
Also Read: Microsoft planning thousands more job cuts aimed at salespeople
Updated On Jun 19, 2025, 07:25 PM IST
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