One quick thing: Byju Raveendran hits back, says investors ran away when times got tough

In today’s newsletter: 

• RBI blow for Sachin Bansal's Navi
• Zepto, Zomato in fundraise mode
• Infosys disappoints, Wipro shines

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The Reserve Bank of India (RBI) has dealt a major regulatory blow!

The RBI has ordered Sachin Bansal's Navi Finserv and three other non-banking financial companies (NBFCs) to halt all new loan disbursements starting October 21.

In addition to Navi Finserv, the other NBFCs impacted by this restriction include:

• Asirvad Micro Finance

• Arohan Financial Services

• DMI Finance

The RBI has taken issue with these firms’ pricing policies, specifically their Weighted Average Lending Rate (WALR) and the interest spread they're charging. 

• The RBI says these numbers are just too high and don’t align with regulations

While the RBI will reassess the situation once it receives more information from these companies, the immediate impact is disruption to their lending operations.

Find out more

Looks like Zepto isn't just delivering groceries in 10 minutes — it’s also raising funds just as fast! Or at least, that's the vibe it’s giving off. 

Zepto is gearing up to raise $100-150 million from Motilal Oswal, Indian family offices and other high networth individuals (HNIs), sources told us. 

• Zepto’s valuation will be unchanged at $5 billion during the ongoing round
  
  
• Motilal Oswal will invest $40 million and will facilitate the remaining investment from HNIs and large family offices
  
  
• Of the $40 million that Motilal Oswal plans to pump in, $15 million will come from its co-founder and chairman, Raamdeo Agrawal
  
  
• Agrawal is already an investor in Zepto and plans to up his stake in the company

This will be Zepto’s third large ticket fundraise in less than four months once complete. 

• It raised $665 million in June at $3.6 billion valuation
  
  
• Then another $340 million a few weeks later in August at a $5 billion valuation

Zepto’s valuation has grown from $1.4 billion in August 2023 to $5 billion in a year’s time as investors bet big on quick commerce and its potential in India.

Zepto is not the only company raising money in its industry. 

• Zomato, the publicly listed food tech giant, is also seeking shareholders’ approval for a capital raise after a gap of three years (it IPO’d in 2021)
  
  
• Zomato already had cash reserves of $1.5 billion at the end of the June quarter, but wants more to ready a cash chest as Swiggy and Zepto prepare for their IPO

The verdict is out for October 17 IT results, and Wipro has outperformed its larger rival, Infosys.

The Bengaluru-based company missed Street estimates on net profit, margins, revenue guidance, and total contract value in the second quarter. However, its revenue was in-line with average analyst estimates.

• Net profit increased 2.2% quarter-on-quarter (QoQ) to Rs 6,506 crore
  
  
• Revenue increased 4.2 % QoQ to Rs 40,986 crore
  
  
• Increased full-year revenue growth guidance to 3.75-4.5%, from 3-4% in Q1
  
  
• The IT major’s operating margin was flat at 21.1%
  
  
• On a positive note, Infosys added almost 2,500 employees in Q2

On the other hand, the cross-city rival performed better, with profit, revenue, margins, and deal wins exceeding analyst estimates.

• Net profit rose 21% to Rs 3,209 crore from the year-ago period
  
  
• Consolidated revenue fell 1% YoY to Rs 22,302 crore
  
  
• Large deal bookings increase by almost 17% to $1.49 billion YoY
  
  
• The headcount increased by almost a thousand employees

The banking, financial, services, and insurance (BFSI) sector has seen green shoots for both companies, and the performance is expected to continue.

• Slowing inflation in the US and major banks reporting better-than-expected numbers will be a strong tailwind in the coming quarters

Both the companies said the demand environment has remained tepid as was the case in the previous quarters.

• They also said that Global Capability Centre’s (GCCs) are driving growth.

This is contrary to what many believe that GCCs are eating up into revenues of IT companies.

• Nvidia has released a new LLM called Llama-3.1-Nemotron-70B-Instruct that reportedly surpassed OpenAI's GPT-4 and Anthropic's Claude 3.5 Sonnet in certain benchmarks.

• Lightmatter, a startup developing light-based computing products, has raised $400 million in a Series D funding round led by T. Rowe Price Associates, valuing the company at $4.4 billion.

Imagine a world where machines surpass human intelligence and can solve problems we can't even imagine. 

• It's not science fiction; it's a very real possibility

Max Tegmark, a leading AI researcher, takes us on a journey through a potential future in his book Life 3.0, exploring the opportunities and the challenges it presents.

• This book is a must-read for anyone interested in the future of AI and its implications 

Check it out

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