Latest news with #Esop
Economic Times
12 hours ago
- Business
- Economic Times
Sebi tweaks for ease of doing startups
Sebi took a triad of decisions this week to encourage startups to list in India. This should strengthen the trend of reverse flipping from more business-friendly foreign jurisdictions. Startup founders can now hold on to employee stock options issued a year prior to filing for an IPO. Investors in convertible securities are no longer needed to hold shares arising from such conversion for at least a year. Shares held by some categories of investors can be counted among what promoters have to put up for listing. The markets regulator is, thus, addressing intent and means to list in India. The relaxed regulatory stance fits into the Indian investor appetite for quality paper that draws startups back to the country after exploring deep VC markets abroad. These decisions matter, because they appreciate the distinction between startups and traditional businesses. Sweat equity is a means of deferred compensation for startup founders who go through several rounds of equity dilution before they can take their company public. Leadership continuity is preserved if founders remain invested in their companies post-listing. Widening the pool of investors who can participate in a startup's public issue, and lowering the founder's minimum contribution to the issue, ought to make the market more liquid. Sebi's decisions were taken against the backdrop of a rising number of Esop buybacks and IPOs by startups. This is a good time to make the Indian equity market more friendly for startup founders. Separately, Sebi is setting the stage for broader foreign participation in gilts as several global indices incorporate India's sovereign debt. Easier disclosure requirements will be imposed on FPIs operating exclusively in the gilts segment. India is anticipating substantially larger foreign inflows into its gilts market, and is seeking tighter integration in global bond indices. Relaxations on periodicity and extent of disclosures for the special category of FPIs in the government bond market should aid the process.
Economic Times
17 hours ago
- Business
- Economic Times
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. Sponsor ETtech Top 5 & Morning Dispatch! Why it matters: ETtech Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and employees. The opportunity: Reach a highly engaged audience of decision-makers. Boost your brand's visibility among the tech-savvy community. Custom sponsorship options to align with your brand's goals. What's next: Interested? Reach out to us at spotlightpartner@ to explore sponsorship opportunities. 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
Time of India
17 hours ago
- Business
- Time of India
China's rare-earth squeeze alarms tech; Groww's new play
China's rare-earth squeeze alarms tech; Groww's new play Want this newsletter delivered to your inbox? Also in the letter: Alarms ring at speaker, wearables, TV makers on Chinese rare-earth squeeze 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: Also Read: Groww looks to offer trading in corporate bonds, to apply for Sebi licence Driving the news: Signifiance: 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: Sponsor ETtech Top 5 & Morning Dispatch! Why it matters: The opportunity: Reach a highly engaged audience of decision-makers. Boost your brand's visibility among the tech-savvy community. Custom sponsorship options to align with your brand's goals. What's next: IT stocks slip up to 3.5% after Fed holds rates, flags persistent inflation What happened: Big losers: 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: Explained: Sebi's new Esop norms for IPO-bound startup founders, reverse-flipping What's the news: 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: Microsoft prepared to abandon high-stakes talks with OpenAI 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: Also Read: China's rare earth export controls are concerning Indian electronic manufacturers, who are facing production halts. This and more in today's ETtech Top 5.■ IT stocks tank■ Explained: Sebi's new Esop norms■ Microsoft vs OpenAIChina's curbs on rare earth 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 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.(L-R) Harsh Jain, Neeraj Singh, Lalit Keshre and Ishan Bansal, founders, GrowwOnline stockbroker Groww is planning to expand its mobile app to include trading in corporate 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 May, Groww confidentially filed its draft red herring prospectus with Sebi, aiming to raise between $700 million and $1 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 Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and Reach out to us at spotlightpartner@ to explore sponsorship IT stocks slipped in Thursday's trade after the US Federal Reserve kept interest rates unchanged, with LTIMindtree and Tech Mahindra leading the Fed held its benchmark rate steady at 4.25% to 4.5%, citing ongoing inflation concerns and a cautious economic 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 how major IT firms reacted: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 Securities and Exchange Board of India (Sebi) has approved several measures to ease doing business, including a long-awaited change for startup founders The market regulator will allow startup founders to retain their employee stock options (Esops) even after their companies go 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 CEO Sam Altman with Microsoft CEO Satya NadellaMicrosoft is prepared to step back from 'high-stakes' talks with OpenAI over the future of their alliance, the Financial Times reported on 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.
Time of India
a day ago
- Business
- Time of India
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 Tell me more: 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 Tell me more: 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 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 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) 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 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 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 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 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 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 claimed Think and Learn was deprived of the money, which its directors Byju Raveendran, Riju Raveendran, and Divya Gokulnath, should have early April, Riju Raveendran approached the NCLT, claiming Ajmera should be removed as the RP of Think and Learn, citing conflict of deeptech-focused venture capital funds are stepping up their fundraising efforts , as the ecosystem matures with growing government backing and favourable geopolitical 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 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 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
Mint
2 days ago
- Business
- Mint
Sebi reforms focus on PSU delisting, startup Esops, easier path for foreign investments in govt bonds
The Securities and Exchange Board of India (Sebi) on Wednesday cleared a series of regulatory reforms aimed at improving market efficiency, investor access, and startup participation. Key among them were easing restrictions on employee stock options (Esops) for startup founders after listing and permitting voluntary delisting of public sector undertakings (PSUs). The board, led by Tuhin Kanta Pandey in his second meeting as Sebi chairperson, also approved changes to allow greater flexibility for alternative investment funds (AIFs), and eased compliance for foreign investors in sovereign debt. Sebi allowed startup founders to retain employee stock ownership plans (Esops) after their companies go public—a shift from current norms that classify founders as 'promoters' upon IPO filing, thereby disqualifying them from Esop eligibility. This move recognizes the role of founders who often trade salaries for equity, and ensures continued alignment with shareholders. These Esops not only align founders' interests with those of other shareholders, but also offer them a continuing incentive to drive long-term growth. To avoid misuse, Sebi mandated a one-year cooling-off period between Esop grants and IPO filing. The concern was that issuing Esops shortly before an IPO could be exploited to enrich insiders ahead of a public listing. In a move aligned with the government's strategic disinvestment agenda, Sebi approved a framework for voluntary delisting of PSUs. The new mechanism, subject to shareholder approval and safeguards, marks a significant shift from a traditionally restrictive regime that made PSU delistings rare and difficult. The government, which owns majority stakes in several PSUs, has been pursuing strategic exits as part of its broader economic agenda. The new framework could expedite government exits and improve the efficiency of the disinvestment process. Sebi cleared new rules to enable AIFs to offer co-investment opportunities via a co-investment vehicle (CIV), giving large investors enhanced access to high-quality deals. The co-investment route gives select AIF investors an opportunity to make additional investments in the same unlisted companies where the AIF has invested. This is done through a separate co-investment vehicle, which is structured as an independent scheme under an AIF. In a related move, AIF managers can now offer advisory services across investor categories, regardless of whether their fund holds positions in those listed securities. This aims to boost operational flexibility and professional advisory capabilities. Sebi approved a simplified framework for foreign portfolio investors (FPIs) investing exclusively in Indian government bonds (IGBs). Given the lower-risk nature of sovereign debt, registration and compliance norms will now be eased, making India more attractive to long-term global capital. This reform is part of Sebi's broader strategy to make Indian markets more accessible to low-risk global investors. The board reviewed a potential settlement scheme for commodity brokers involved in the National Spot Exchange Limited (NSEL) case. With over 300 show-cause notices issued and recommendations from the Securities Appellate Tribunal (SAT), Sebi is considering resolution under its consent regulations framework.
