Techno Blender
Digitally Yours.

Byju’s EGM in focus; Elevation’s long Paytm bet

0 22


Seeking to oust Byju’s founder and his family from the edtech firm’s board, a group of investors will hold an extraordinary general meeting today. However, founder Byju Raveendran and his family said they will not attend the meeting. This and more in today’s ETtech Morning Dispatch.

Also in this letter:
■ RBI’s plans to revolutionise credit system
■ Space industry cheers revised FDI rules
■ Uber signs MoU with ONDC


Face-off likely at EGM over plan to oust Byju’s CEO

Dubbing the EGM scheduled by Byju’s investors today – to oust its founder Byju Raveendran as CEO and change the company’s board – as invalid, the edtech firm said that the founders and their family members won’t attend the meeting.

Byju Raveendran & family to skip EGM: Byju’s on Thursday said its founder Byju Raveendran, his wife and cofounder Divya Gokulnath, and brother Riju Ravindran will not attend the EGM called by a group of investors seeking Raveendran’s removal as CEO and a change in the company’s board.

EGM dubbed ‘invalid’: The troubled edtech firm claimed the EGM scheduled for Friday morning is “invalid”. People close to the investor group seeking the change, however, said they are going ahead with the EGM.

Investors’ allegations: A group of investors in Byju’s parent Think & Learn have also raised concerns over the management’s failure to enforce the company’s rights. The investors have red-flagged the acquisition of Aakash Educational Services Ltd (AESL) saying Byju’s agreed to “onerous” and “prejudicial” loan terms with Davidson Kempner (DK), among other matters.

EGM gfx

Raveendran also misled certain shareholders about the existence of Rs 400 crore earmarked for partially repaying the DK loan, according to the EGM notice.

The investors have also sought information on investigations by the Directorate of Enforcement, the MCA and the Serious Fraud Investigation Office.

Aakash acquisition in focus: Byju’s acquired Aakash Educational Services Ltd (AESL) in 2021 for $950 million, by paying 70% in cash with the remaining to be adjusted against Think & Learn equity.

However, Blackstone and the Chaudhry family declined to execute the share-swap as per the original agreement, citing reasons such as delays in filing the FY22 financial statement, defaulting on its term loan B (TLB) as well as governance issues.

This was despite the company’s legal counsel confirming binding obligations for the share-swap as per the transaction terms, according to the investors.

Valuation Byju

Catch up quick: The Karnataka High Court on Wednesday passed an interim order directing that any resolutions passed at the EGM would be contingent upon its final decision on a petition filed by the edtech firm against the investors.

The matter has been listed for next hearing on March 13.


Elevation Capital’s massive gamble on Paytm backfires

Paytm Elevation

Elevation Capital, the largest institutional shareholder in Paytm parent One 97 Communications, is facing a massive 40% decline in the value of its holding as the shares of the fintech company continue to drop.

Tell me more: The Ravi Adusumalli-led fund’s 15% stake in One 97, which was valued at about Rs 6,100 crore when the post-IPO lock-in expired in November 2022, had shrunk by nearly 40% to Rs 3,800 crore at the end of trading on Thursday.

Eroding value of Paytm investor wealth

While Elevation’s notional gains were shaved off dramatically, it entered the company so early that they will still be in the positive, a top venture investor told us.

Also read | Elevation says fintechs building tailored products are taking off

Elevation’s Paytm journey: The marquee investment firm cut its first cheque in the company way back in 2007, and has since invested around Rs 500 crore to Rs 520 crore, according to Paytm’s IPO documents.

Elevation sold shares worth over Rs 2,000 crore at the time of the IPO in November 2021, but the early-stage venture firm has since not made any further transactions in its holdings.

Peer comparison: Unlike Elevation, SoftBank, Alibaba and Ant Financial as well as Berkshire Hathaway have either partially or fully exited their stakes in Paytm.

SoftBank now holds less than 5% in the payments firm compared to 18.5% at the time of the IPO, while China’s Ant Financial has 9.8%. Berkshire Hathaway fully exited its holding in the Indian firm last November after booking a loss of around Rs 630 crore.

Stock in free-fall: Following the Reserve Bank of India’s January 31 directive on Paytm Payments Bank, the stock price of One 97 has nosedived nearly 50%.

BSE Paytm

On Thursday, One 97 Communications’ stock ended at Rs 388.20 on the BSE, down 1.8% from its previous close. The company’s market capitalisation at this price stands at over Rs 24,000 crore, or nearly $3 billion.


RBI pushing UPI-like credit platform for farmers, MSMEs

RBI UPI credit

Digital lending might have picked up steam but a major segment of the country still depends on bank branches and moneylenders for informal credit. The Reserve Bank of India (RBI) wants to change that and is adopting the same strategy that it did with Unified Payments Interface (UPI) and digital payments.

Open and seamless credit: Around Rs 3,500-crore worth of loans have been disbursed by the banks through the open ecosystem for credit disbursement which is being built by the RBI through RBIH (Reserve Bank Innovation Hub). The open source platform similar to UPI will have banks on one end, and fintechs as distributors and consumers on the other. It is called PTPFC (Public Tech Platform for Financial Credit).

fintech gfx

Regulatory action: Back in 2022, the RBI first opened up digital KCC (Kisan Credit Cards), an important financing tool for Indian farmers. After the successful conduct of pilots in certain districts, the RBI pushed for the creation of PTPFC to enable all forms of credit through an open network. Agri loans, MSME loans, two-wheeler loans and such are being disbursed through this platform

New opportunities: This is a huge market opening up for lenders and fintechs. Lenders are looking at PTPFC as a complimentary financing method through which they can get verified data from government and quasi-government sources like land records etc.

Fintechs can build interactive applications on top of the platform to get customers. Citizens will benefit from instant digital and cheaper processes with loans getting sanctioned in a few minutes compared to days and weeks previously.


Other Top Stories By Our Reporters

space tech FDI

Space companies shoot for the moon as govt eases FDI rules: Space sector startups involved in satellite manufacturing, launch vehicle operations and component manufacturing are set to gain from the latest amendments to the foreign direct investment (FDI) rules for India’s space sector.

India has shown how to deal with China-linked companies: US FCC commissioner | Countries across the world could learn from India on the ways to deal with the cybersecurity threats posed by companies which are either of Chinese origin or are closely linked to the CCP, US Federal Communications Commission (FCC) commissioner Brendan Carr told us.

Uber, ONDC sign MoU to explore integration with the network: Uber India has signed a memorandum of understanding (MoU) with the Open Network for Digital Commerce (ONDC) to explore a potential integration for expanding the platform’s range of ride-hailing offerings. Uber India did not elaborate on the partnership.

Consumer, fintech top sectors for venture debt funding in 2023: Report | Consumer and fintech emerged as the top sectors for raising funds through venture debt in India in 2023, leading in both deal volume and total funding raised respectively. Venture debt globally stood at about $60-65 billion in 2023, according to the ‘India Venture Debt report 2024’ by venture debt firm Stride Ventures.


Global Picks We Are Reading

■ Tech Job Interviews Are Out of Control (Wired)
■ AI’s Unlikely Benefactor: Blackstone’s 77-Year-Old CEO Steve Schwarzman (WSJ)
■ Good luck catching up to Nvidia (FT)


Seeking to oust Byju’s founder and his family from the edtech firm’s board, a group of investors will hold an extraordinary general meeting today. However, founder Byju Raveendran and his family said they will not attend the meeting. This and more in today’s ETtech Morning Dispatch.

Also in this letter:
■ RBI’s plans to revolutionise credit system
■ Space industry cheers revised FDI rules
■ Uber signs MoU with ONDC


Face-off likely at EGM over plan to oust Byju’s CEO

Byju

Dubbing the EGM scheduled by Byju’s investors today – to oust its founder Byju Raveendran as CEO and change the company’s board – as invalid, the edtech firm said that the founders and their family members won’t attend the meeting.

Byju Raveendran & family to skip EGM: Byju’s on Thursday said its founder Byju Raveendran, his wife and cofounder Divya Gokulnath, and brother Riju Ravindran will not attend the EGM called by a group of investors seeking Raveendran’s removal as CEO and a change in the company’s board.

EGM dubbed ‘invalid’: The troubled edtech firm claimed the EGM scheduled for Friday morning is “invalid”. People close to the investor group seeking the change, however, said they are going ahead with the EGM.

Investors’ allegations: A group of investors in Byju’s parent Think & Learn have also raised concerns over the management’s failure to enforce the company’s rights. The investors have red-flagged the acquisition of Aakash Educational Services Ltd (AESL) saying Byju’s agreed to “onerous” and “prejudicial” loan terms with Davidson Kempner (DK), among other matters.

EGM gfx

Raveendran also misled certain shareholders about the existence of Rs 400 crore earmarked for partially repaying the DK loan, according to the EGM notice.

The investors have also sought information on investigations by the Directorate of Enforcement, the MCA and the Serious Fraud Investigation Office.

Aakash acquisition in focus: Byju’s acquired Aakash Educational Services Ltd (AESL) in 2021 for $950 million, by paying 70% in cash with the remaining to be adjusted against Think & Learn equity.

However, Blackstone and the Chaudhry family declined to execute the share-swap as per the original agreement, citing reasons such as delays in filing the FY22 financial statement, defaulting on its term loan B (TLB) as well as governance issues.

This was despite the company’s legal counsel confirming binding obligations for the share-swap as per the transaction terms, according to the investors.

Valuation Byju

Catch up quick: The Karnataka High Court on Wednesday passed an interim order directing that any resolutions passed at the EGM would be contingent upon its final decision on a petition filed by the edtech firm against the investors.

The matter has been listed for next hearing on March 13.


Elevation Capital’s massive gamble on Paytm backfires

Paytm Elevation

Elevation Capital, the largest institutional shareholder in Paytm parent One 97 Communications, is facing a massive 40% decline in the value of its holding as the shares of the fintech company continue to drop.

Tell me more: The Ravi Adusumalli-led fund’s 15% stake in One 97, which was valued at about Rs 6,100 crore when the post-IPO lock-in expired in November 2022, had shrunk by nearly 40% to Rs 3,800 crore at the end of trading on Thursday.

Eroding value of Paytm investor wealth

While Elevation’s notional gains were shaved off dramatically, it entered the company so early that they will still be in the positive, a top venture investor told us.

Also read | Elevation says fintechs building tailored products are taking off

Elevation’s Paytm journey: The marquee investment firm cut its first cheque in the company way back in 2007, and has since invested around Rs 500 crore to Rs 520 crore, according to Paytm’s IPO documents.

Elevation sold shares worth over Rs 2,000 crore at the time of the IPO in November 2021, but the early-stage venture firm has since not made any further transactions in its holdings.

Peer comparison: Unlike Elevation, SoftBank, Alibaba and Ant Financial as well as Berkshire Hathaway have either partially or fully exited their stakes in Paytm.

SoftBank now holds less than 5% in the payments firm compared to 18.5% at the time of the IPO, while China’s Ant Financial has 9.8%. Berkshire Hathaway fully exited its holding in the Indian firm last November after booking a loss of around Rs 630 crore.

Stock in free-fall: Following the Reserve Bank of India’s January 31 directive on Paytm Payments Bank, the stock price of One 97 has nosedived nearly 50%.

BSE Paytm

On Thursday, One 97 Communications’ stock ended at Rs 388.20 on the BSE, down 1.8% from its previous close. The company’s market capitalisation at this price stands at over Rs 24,000 crore, or nearly $3 billion.


RBI pushing UPI-like credit platform for farmers, MSMEs

RBI UPI credit

Digital lending might have picked up steam but a major segment of the country still depends on bank branches and moneylenders for informal credit. The Reserve Bank of India (RBI) wants to change that and is adopting the same strategy that it did with Unified Payments Interface (UPI) and digital payments.

Open and seamless credit: Around Rs 3,500-crore worth of loans have been disbursed by the banks through the open ecosystem for credit disbursement which is being built by the RBI through RBIH (Reserve Bank Innovation Hub). The open source platform similar to UPI will have banks on one end, and fintechs as distributors and consumers on the other. It is called PTPFC (Public Tech Platform for Financial Credit).

fintech gfx

Regulatory action: Back in 2022, the RBI first opened up digital KCC (Kisan Credit Cards), an important financing tool for Indian farmers. After the successful conduct of pilots in certain districts, the RBI pushed for the creation of PTPFC to enable all forms of credit through an open network. Agri loans, MSME loans, two-wheeler loans and such are being disbursed through this platform

New opportunities: This is a huge market opening up for lenders and fintechs. Lenders are looking at PTPFC as a complimentary financing method through which they can get verified data from government and quasi-government sources like land records etc.

Fintechs can build interactive applications on top of the platform to get customers. Citizens will benefit from instant digital and cheaper processes with loans getting sanctioned in a few minutes compared to days and weeks previously.


Other Top Stories By Our Reporters

space tech FDI

Space companies shoot for the moon as govt eases FDI rules: Space sector startups involved in satellite manufacturing, launch vehicle operations and component manufacturing are set to gain from the latest amendments to the foreign direct investment (FDI) rules for India’s space sector.

India has shown how to deal with China-linked companies: US FCC commissioner | Countries across the world could learn from India on the ways to deal with the cybersecurity threats posed by companies which are either of Chinese origin or are closely linked to the CCP, US Federal Communications Commission (FCC) commissioner Brendan Carr told us.

Uber, ONDC sign MoU to explore integration with the network: Uber India has signed a memorandum of understanding (MoU) with the Open Network for Digital Commerce (ONDC) to explore a potential integration for expanding the platform’s range of ride-hailing offerings. Uber India did not elaborate on the partnership.

Consumer, fintech top sectors for venture debt funding in 2023: Report | Consumer and fintech emerged as the top sectors for raising funds through venture debt in India in 2023, leading in both deal volume and total funding raised respectively. Venture debt globally stood at about $60-65 billion in 2023, according to the ‘India Venture Debt report 2024’ by venture debt firm Stride Ventures.


Global Picks We Are Reading

■ Tech Job Interviews Are Out of Control (Wired)
■ AI’s Unlikely Benefactor: Blackstone’s 77-Year-Old CEO Steve Schwarzman (WSJ)
■ Good luck catching up to Nvidia (FT)

FOLLOW US ON GOOGLE NEWS

Read original article here

Denial of responsibility! Techno Blender is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment