Also in this letter:
■ Wipro’s pipeline growing across sectors, says CEO
■ Startups face barrage of probing questions from job seekers
■ NFT platform Rario to launch marketplace in August
Global electronics, hardware makers seek delayed PLI payments
Several global electronics and hardware manufacturers are petitioning the union government to release delayed payments due to them under the country’s ambitious production-linked incentive (PLI) schemes, sources told us.
Uncertainty: They said the delay in payouts is leading to uncertainty on future investment plans by top corporations including computer major Dell, iPhone maker Wistron, electronics maker Dixon and Netweb Technologies, among others.
In addition to sending a series of petitions to the ministry of electronics and information technology (MeitY) seeking expedited payment of incentives, representatives of these companies were scheduled to meet with the ministry secretary on Wednesday to press their case, sources added.
Why the delay? Several people within the IT ministry and company executives told us the delay is because the nodal agency tasked with review and release of incentives — the Industrial Finance Corporation of India (IFCI) — has not been able to complete the required audit of submitted claims.
IFCI and MeitY did not respond to our queries on the reasons for the delay.
Flagship scheme: The government’s PLI schemes seek to reduce India’s reliance on exports and boost domestic manufacturing of several items such as mobile phones, related accessories, servers, routers, switches, telecom products, textile, medical equipment and solar panels, among others.
The first of these PLI schemes was launched in March 2020. Official data shows that local production of electronics goods increased at a compound annual growth rate (CAGR) of 17.9% between 2015-16 and 2020-21.
Wipro’s pipeline growing across sectors, says CEO
Buoyed by a record deal pipeline despite macroeconomic headwinds, Wipro has forecast 3-5% revenue growth – ahead of estimates – in the ongoing quarter.
Thierry Delaporte, the chief executive of India’s fourth largest software exporter, told us in an interview that operating margins would climb to 17-17.5% over the next few quarters on investments in freshers and further operational efficiency. Edited excerpts from the interview:
Despite the obvious macroeconomic headwinds, you have guided for a very robust quarter. What gives you confidence?
As a leader, I always felt the need to stay very close to what is going on in terms of macro – the political environment, economic environment and the war situation. So, I’m very aware of the clouds that we can see in some markets, the slowdown and inflation. But the more immediate feedback I get is from connecting with three to four clients every day.
Our clients continue to invest in technology but for slightly different reasons. In the past, it was possibly for creating a new business model or reducing employee expenses. Now, it might be to drive more productivity or to reduce the cost of running the business. We are very well positioned from an offering standpoint to respond to the expectation.
Secondly, our pipeline volume is the biggest ever.
Has Wipro firmed up its hybrid working model? Are you going to smaller cities?
We are trying to stay pragmatic. I am taking a little bit of time because I want to understand what works best for our employees. What if you open offices in tier III cities and our employees still prefer to work from home? I want them to feel that they can work in the model that works best for them personally.
Profit fell 20.9% year-on-year in Q1: On Wednesday, Wipro reported a profit of Rs 2,563 crore in Q1 — a 20.9% year-on-year (YoY) decline and below analysts’ estimate of Rs 2,950 crore. Revenue rose 17.9% YoY to Rs 21,528.6 crore, with its strategic market units and global business verticals clocking double-digit growth.
ETtech Ecommerce Index
We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.
Startups face barrage of probing questions from job seekers
How long is your money going to last? Why do you think your business model is going to work? Can you afford to go ahead with your buyback plans? These are some of the questions hiring managers at startups are facing from prospective employees.
Details: Candidates at senior and CXO levels are now probing recruiters and founders about how startups are spending money, their runway, when the next tranche of funding is expected, and so on, amid a slowing funding climate and a spate of layoffs across the sector, industry insiders said.
“Some of these questions came our way in the past as well… but now people are probing much deeper,” said Ashwin Damera, CEO of edtech unicorn Eruditus.
Questions vary: Junior and mid-level candidates are asking about previous layoffs, and whether increments have been given in the last two years, to check the startup’s financial strength. At the senior level, there are questions about down rounds, cash flows, whether employee stock option buybacks will be postponed, when the startup expects to break even.
NFT platform Rario to launch marketplace in August
Dream Sports-backed cricket non-fungible token (NFT) platform Rario will launch its marketplace in August, after abruptly halting trading in March amid regulatory uncertainty surrounding virtual digital assets.
It has also transitioned out of Polygon to its own private blockchain, called Rario Chain, senior executives said on Monday.
Singapore-based Rario was founded by Sunny Bhanot and Ankit Wadhwa amid a global boom in NFTs and cryptocurrencies.
Last August, Rario partnered with Polygon to mint digital collectibles of cricketers Zaheer Khan, Smriti Mandhana, Shefali Verma, Shakib Al Hassan and Faf du Plessis. Those collectibles will move to Rario Chain and all new NFTs will also be on the company’s private chain, executives said.
Quote: “Rario Chain is built leveraging the Polygon Edge framework. Blockchain throughput is dependent on several factors — number of validator nodes, node size, consensus mechanism and smart contract business logic. We are in the process of optimising the throughput at every stage and improving performance,” Wadhwa told us.
Karnataka’s new aerospace policy to promote drone technology
The Karnataka government has sought to include drones in its new aerospace and defence policy as it seeks to promote investments in emerging technology.
People privy to the discussions told us the draft policy has also mooted sops for fresh investments or expansion of existing units in the aerospace and defence sector in Bengaluru. All recent policies of the state offered incentives and concessions for investments only in regions outside of Bengaluru.
The change in stance shows that the government wants to include the country’s technology capital as well for incentives, as it is home to a vibrant defence and aerospace manufacturing ecosystem and a 1,200-acre cluster is taking shape near the Kempe Gowda international airport.
Indian startup ecosystem created 7.68 lakh jobs in the past six years
India has registered about 72,983 startups in the last six years, and these companies have generated about 7.86 lakh jobs over this period, the government informed parliament on Wednesday.
Maharashtra pipped Delhi and Karnataka – frequently dubbed the startup capitals of India – in terms of the number of startups registered and jobs created since the Startup India initiative was launched in January 2016, according to government data.
While Maharashtra topped the list with about 13,519 startups registered and 1.46 lakh jobs created in six years, Karnataka and Delhi came in second and third, respectively.
Yes, but: The Indian startup ecosystem is currently struggling amid a funding winter. The ongoing Russia-Ukraine war, US interest rate hikes, looming fears of a recession in major economies, rising inflation and other macroeconomic factors drove startup funding 23% down in the second quarter of 2022, according to data from CB Insights.
Several startups, including Unacademy, Byju’s and Meesho have laid off thousands of employees between them.
Other Top Stories By Our Reporters
LetsVenture CEO launched micro VC: Shanti Mohan, the cofounder and chief executive of early-stage investment firm LetsVenture, has launched a new micro venture capital (VC) firm Propell, with an investment corpus of Rs 50 crore. Propelll, founded last year, will focus on investments in early-stage startups in ecommerce, software services, D2C brands and technology enablement platforms.
Cloud adoption report: Large-scale cloud adoption has the potential to account for about 8% of India’s gross domestic product (GDP), contributing $380 billion by 2026, according to a new report by the National Association of Software and Services Companies (Nasscom).
Global Picks We Are Reading
■ TechScape: suspicious of TikTok? You’re not alone (The Guardian)
■ NASA sets launch dates for its return to the moon (The Washington Post)
■ Tesla Poised for Earnings Hit From China Factory Shutdown (The Wall Street Journal)
