Breaking: NCLT directs Byju's to maintain status quo on shareholding

One quick thing: Flipkart co-founder Binny Bansal advises startups to incorporate in India 

• What changed Bansal's mind about quick commerce? Find out more

In today’s newsletter: 

• Ghar wapsi scheme for startups to flip to GIFT City 
• Zepto to raise $650M at $3.5B valuation  
• Nachiket Deshpande leads LTIMindtree CEO race

Was this newsletter forwarded to you? You can sign up for Tech3 here

When the Silicon Valley Bank collapsed last year, the crisis hit scores of Indian startups. It laid bare the magnitude of the problem of Indian startups being domiciled in the US.

• Although the government exhorted them to flip back to GIFT City, not many have taken the bait

The Union Budget may pave the way for startups to re-domicile in the special economic zone of GIFT City by minimising the tax implications of the move.

• Due to certain capital gains norms, PhonePe had to pay a billion dollars in tax last year to flip back to India

But the new scheme may make it tax neutral for companies like Zepto, Razorpay and Meesho to return.

“At least 20 existing unicorns want to come back to India and domicile here… if regulations get much easier,” PhonePe founder Sameer Nigam said last year.

Just as Budget 2021 had announced a repatriation scheme for foreign funds to re-domicile to GIFT City in a tax-free manner, a similar provision can allow startups to re-domicile to India.

• The eligibility criteria for the scheme might include riders like the company should have been started by Indian citizens

• It should be unlisted and substantial value of the company’s shares are derived from assets/business in India

The government's annual Economic Survey of 2023 had recognised the challenges faced by startups looking to shift their domicile back to India.

• It suggested measures like simplification of employee stock option taxes, capital gains tax regimes like those of Singapore, the UAE and the Netherlands

Go deeper

Zepto is proving to be as speedy with fundraising as it is with deliveries.

Zepto is on track to secure a whopping $650 million in fresh funding, propelling its valuation to $3.5 billion – more than double of $1.4 billion in August 2023.

• Nexus Venture Partners and its limited partner, StepStone Group, existing investors in Zepto, will together lead the round 

• Existing investor Glade Brook Capital is also participating in the round

• Newcomers to the Zepto cap table include Avenir Growth, Lightspeed Venture Partners, DST Global, and Avra

For Nexus, this will be one of the biggest investments it has ever made. 

Zepto, known for creating the 10 minute grocery delivery market in India, received further validation for its efforts. 

Flipkart co-founder Binny Bansal said that what giants like Amazon and Flipkart couldn’t achieve, the new crop of founders—Aadit Palicha and Kaivalya Vohra—accomplished.

“There was Amazon, Flipkart and other big companies, all of them were trying to do this (but) the people who figured it out are new founders…If you look at Zepto, they were able to build a really strong team (by hiring) from Flipkart, Amazon and have been able to execute very well,” Bansal said. 

Dig deeper

The musical chairs game at the helm of India's IT giants continues, with LTIMindtree's CEO position up for grabs.

Nachiket Deshpande, the company's COO, has emerged as the favourite to succeed Debashis Chatterjee, whose term ends in late 2025.

• Chatterjee was the first CEO of the merged LTIMindtree after its amalgamation in 2022
  
  
• Deshpande and Chatterjee were colleagues for nearly two decades at Cognizant before the former joined L&T Infotech in 2018

Sources close to the company told us that Deshpande is the favourite for the role, having built trust within LTIMindtree and secured the confidence of L&T chairman SN Subrahmanyan.

• While Deshpande appears to be the frontrunner, earlier reports suggested Sudhir Chaturvedi, the president and an Infosys veteran, was also being considered

This leadership change comes amidst a period of churn at LTIMindtree. 

• Nearly two dozen senior leaders have left the company for competitors since the merger

Go deeper

Paytm's broking arm couldn’t dodge the shockwaves from the RBI’s crackdown on its associate firm, Paytm Payments Bank (PPB) in February. Paytm Money’s active user base shrank by 2.5% over the past five months, despite a 21% year-on-year surge. We previously reported how users struggled with switching from barred PPB accounts to others, causing dropouts. 

• Meanwhile, competitors Groww, Zerodha, Angel One, and Upstox saw their user bases grow by 90%, 20%, 48%, and 19%, respectively
  
  
• Mumbai-based Dhan stole the spotlight with a 330% surge, albeit on a lower base

Find out more

• Oracle has partnered with the Tamil Nadu Skill Development Corporation (TNSDC) to train and equip more than 2 lakh students in the state in AI, Machine Learning, Blockchain, etc. as part of the Naan Mudhalvan Scheme.
  
  
• Samsung Electronics said its contract manufacturing business plans to offer a one-stop shop for clients to get their AI chips made faster, integrating its global No. 1 memory chip, foundry, and chip packaging services, to harness the AI boom.

One of India's most popular war movies is making a comeback!

• On the 27th anniversary of the release of the iconic Hindi movie Border, actor Sunny Deol announced a sequel titled 'Border 2'

Details about the movie are sparse right now, but the filmmaker JP Dutta, who directed the original film, is producing the movie along with his daughter Nidhi Dutta. T-Series chairman and managing director Bhushan Kumar and his uncle Krishan Kumar are also producers on the movie.

The original movie was based on the real-life events of the 1971 Battle of Longewala between India and Pakistan, featuring Sunny Deol, Jackie Shroff, Suniel Shetty and Akshaye Khanna in leading roles.

It will be interesting to see if any of the cast members from the original movie, besides Deol, will be a part of the sequel.

Read more

Note: By subscribing to Tech3 you have already made the right choice. Top it up with a premium offering, the Moneycontrol Pro Panorama, a newsletter that gives you a sharp take on macros, markets, business and finance. Sign up for Pro from this link to get this newsletter in your inbox and also a host of content enjoyed by 700,000+ subscribers.