One quick thing: Sedemac Mechatronics taps Axis, ICICI Securities, Avendus as bankers for IPO 

In today’s newsletter:

• Big blow for Big Tech 
• Fourth round of trainee layoffs at Infosys 
• Decoding Urban Company's DRHP

P.S.: Introducing the Tech3 Podcast, your daily dose of tech and startup insights. Monday to Friday! Check it out on Spotify or Apple Podcasts

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Settling regulatory probes in India is about to get costlier for Big Tech giants!

In an April 23 circular, the Central Board of Direct Taxes (CBDT) said money paid by businesses to settle contraventions of various regulations, including the Competition Act and the Securities Contracts Act, cannot be claimed as tax deductible. 

• This means the settlement amount will be added to a company’s taxable income—resulting in an effective tax hit of 25.17%

Big names like Amazon, Apple, Google, Flipkart, and Samsung, all currently facing CCI probes for alleged market dominance violations, will feel the heat.

“Taxpayers will not be able to reduce their tax liability by claiming tax deduction for settlement fees and charges after this change,” said Amit Maheshwari, tax partner at AKM Global.

Even listed companies looking to settle securities law violations with SEBI will face the same treatment.

• Last week, Google settled a CCI case involving alleged abuse of market dominance in the smart TV category by paying Rs 20.24 crore as the fee

SEBI whole-time member Kamlesh Varshney recently noted:

“You come for settlement, you pay more than what you end up paying for litigation.”

Legal experts, however, say more clarity is needed, especially for cases settled before the April 23 notification.

“CBDT notification under Section 37 of the Income tax Act, 1961 is helpful as it provides clarity on the deductibility of expenditure incurred in settling the defaults. However, it is not clear if such expenses incurred prior to 23 April, 2025 will be deductible or not,” said Amit Singhania, founder, Areete Law Offices.

Dig deeper

From Mysuru to nowhere: Another batch of Infosys trainees hit a dead end

India’s second-largest IT services company has terminated another 195 trainees from a batch of 680 after they failed internal assessments, sources tell us.

• This marks the fourth round of such exits at the IT major, with nearly 800 freshers let go since February.

The affected trainees were part of an apprenticeship programme and had been onboarded after a delay of more than 2.5 years.

To assuage the grieving, Infosys has tied up with UpGrad for BPM training and NIIT for IT roles, offering the impacted trainees a 12-week course, along with one month’s ex-gratia pay and a relieving letter.

• Of the 800-odd affected, around 250 have enrolled in the skilling programmes, while 150 opted for outplacement services

For those not choosing any of the above, the Bengaluru-based company is offering a travel allowance, transport to Bengaluru, and temporary accommodation at its Mysuru facility.

The terminations come as India’s second-largest IT firm grapples with a muted demand environment and flattish revenue guidance of 0–3% for FY25.

• Though cleared of labour law violations by the Karnataka labour department, the move adds to industry concerns around fresher onboarding
  
  
• After declaring Q4FY25 results, IT majors were hesitant to give out fresher numbers and said demand will dictate the numbers

With the talent tap slowly reopening post-COVID, the Infosys case signals how even entry-level opportunities may come with higher performance thresholds.

Dig deeper

From fixing leaky taps to tapping public markets – Urban Company has got a new gig.

Early and new backers, including Accel India, Bessemer India, Elevation Capital, Tiger Global, and VY Capital, are cashing out, and it’s turning into a blockbuster show.

• Urban Company’s IPO comprises a fresh issue of Rs 429 crore and a Rs 1,471 crore offer for sale

Accel and Elevation Capital, among the early backers, are set to exit at values nearly 17x and 11x higher, respectively, compared to new investor Tiger Global.

• Founders, too, have quietly booked Rs 780 crore via secondary deals over the past few months

The numbers shine bright, but some corners still need scrubbing.

• FY24 revenue hit Rs 828 crore, up 89% since FY22; EBITDA turned positive for the first time
  
  
• The profit, however, rode heavily on a Rs 215 crore deferred tax credit
  
  
• GMV and user base are expanding, but YoY growth is showing signs of deceleration

Before the market debut, a few cracks need sealing.

• Regulatory threats around gig workers and global expansion risks could weigh on margins
  
  
•  Share-based payments ate up 6.9% of FY24 revenue, raising dilution concerns
  
  
• Scaling quality across cities and services remains a pressing operational challenge

Urban Company may be ready for its market makeover—but staying pretty post-listing will take more than a fresh coat.

Dig deeper

• An Anthropic report shows 33% of Claude Code usage comes from startup projects, while enterprise tasks account for less than 24%.

• OpenAI is rolling out a series of new features to improve how users search, shop, and verify information in ChatGPT—marking one of the assistant’s most practical updates yet.

This IPL season, fans aren’t just cheering—they’re travelling. 

Platforms like EaseMyTrip and Cleartrip report 30–35% surges in bookings, with hotels near stadiums selling out fast. 

• Train travel is up 60–65%, and cities like Chennai, Mumbai, and Bengaluru are the hottest destinations 

According to a Skyscanner survey, 80% of fans are happy to travel to watch a live match, many planning months in advance. Find out more

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