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US Banking crisis may hit Indian IT firms; Spotify India’s ad revenue push
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Analysts expect revenues of Indian IT majors like Tata Consultancy Services and Infosys getting adversely impacted due to the ongoing crisis among US regional banks. This and more in today’s ETtech Morning Dispatch.
Also in this letter:
■ FAME II subsidies for two EV makers on hold
■ Ola Electric in talks to raise $250-300 million
■ Around 45,000 AI job openings in India
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Indian IT majors such as Tata Consultancy Services and Infosys could take an up to 30 basis points hit on the revenue in the fourth quarter of FY23 due to their exposure to crisis ridden regional banks in the US, said analysts tracking the sector.
Catch up quick: ET reported on Tuesday that the banking crisis could affect tech spending in India, affecting major IT firms like TCS, Infosys, Wipro, and LTIMindtree, since they are majorly involved with US regional banks.
Spillover effect: Experts also warned that the crisis may spill over from the banking, financial services, and insurance (BFSI) sectors to other verticals such as retail and hitech in the latter part of FY24. According to industry body Nasscom, BFSI dominates enterprise tech spend and offshore outsourcing, contributing about 41% of industry revenue in this fiscal year through March.
Revenue share from BFSI: Wipro has the highest revenue share from BFSI at 35%, followed by TCS (31.5%), Infosys (29.3%) and HCLTech (20%).
Swedish music streaming platform Spotify, which launched its audio-streaming services in India in 2019, is looking to bulk up its sales team fivefold, in a bid to increase its advertising revenue, a senior company executive told ET.
Advertising push: In India, Spotify has achieved a revenue ratio of 50-50 for subscriptions and advertising, which is starkly different from its global revenue mix that has typically favoured paying users. Around 85% of the company's revenue worldwide comes from paid users, but this is gradually changing. In the fourth quarter of last year, 14% of its total revenue came from advertising.
Podcast investments questioned: The company has been sustaining losses due to its heavy investments in podcasts and original content. The company’s heavy investments behind podcasts have come under scrutiny as analysts have questioned as to when it will result in earning revenues for the firm.
India market: India is among the top five markets for Spotify in terms of user base and engagement, Amarjit Singh Batra, managing director, India and general manager, South Asia, Middle East and Africa, Spotify, said. To boost user numbers in India, the platform has utilised product optimization and expanded payment options, such as incorporating the widely used Unified Payments Interface (UPI).
The government has ceased processing pending claims for subsidies under the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) - II scheme for two electric vehicle (EV) manufacturers.
What’s the matter? The pause will stay until the companies provide adequate evidence demonstrating their compliance with the FAME-II requirements. Minister of state for heavy industries, Krishan Pal Gurjar informed the Lok Sabha of the development in a written response. He was responding to a question raised about whether subsidies have been put on hold following complaints about EV makers not complying with the localisation norms.
Catch up quick: ET reported on October 7 that Hero Electric and Okinawa have been served notices by the government. According to the FAME website, models of all these companies have been excluded from availing of the subsidy.
The allegations: Gurjar stated that the ministry of heavy industries has received complaints of subsidy misappropriation due to the violation of localisation norms. Hero Electric and Okinawa have both been accused of using mostly imported components in their vehicles, falsely claiming them to be locally sourced to qualify for subsidies.
Bhavish Aggarwal-led Ola Electric is in talks to raise a fresh round of $250-300 million in growth equity to expand two-wheeler operations and fund its planned battery facility, said people with knowledge of the matter.
Previous funding: Ola Electric raised $200 million in January last year from investors such as Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss and others at a $5 billion valuation. The company is expecting an up round that may see its valuation go up to $6.5-7 billion, based on the expectation of turning ebitda positive from FY24.
More details: Ola Electric is working with an advisor and has reached out to several sovereign wealth funds such as Qatar Investment Authority and Abu Dhabi Investment Authority as well as climate-focussed or energy transition funds like Blackrock and Blackstone among others. Management meetings have begun but discussions are preliminary and at a pre-term sheet stage, said the people cited above.
Milkbasket cofounder starts up again with Sorted, raises $5 million
Sorted cofounders (L-R) Nitin Gupta, Anant Goel, Sahil Madan
Fresh fruits and vegetable supply chain startup, Sorted, which is founded by former Milkbasket cofounder, Anant Goel, has raised $5 million as a part of its ongoing seed funding round.
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.
There are 45,000 artificial intelligence job openings in India, with data scientists and ML engineers among the most sought after careers, as per a report released by TeamLease Digital.
Jobs in various industries: The report finds a wide variety of key job roles in the AI space across major industries, including healthcare: clinical data analyst, medical imaging specialist, health informatics analyst, among others.
Salary packages: According to the report, freshers who become data engineers can earn up to Rs 14 lakh per annum, ML engineers up to Rs 10 lakh, data scientists up to Rs 14 lakh, devops engineers up to Rs 12 lakh, data architects up to Rs 12 lakh, BI analysts up to Rs 14 lakh, and database admins up to Rs 12 lakh. Additionally, candidates with eight years of experience in similar fields can earn even higher salaries ranging from Rs 25 lakh to 45 lakh per annum.
Outgoing TCS CEO Rajesh Gopinathan in line for advisory role: sources | Outgoing chief executive Rajesh Gopinathan may stay on in Tata Consultancy Services (TCS) in an advisory role, people familiar with the matter said.
Zomato Gold helps company reclaim market share from Swiggy: HSBC report: Zomato, since the relaunch of its loyalty programme, has started reclaiming the market share it had lost in the second half of 2022 to rival food delivery company Swiggy, HSBC Global Research said in a note.
WazirX blocks 2,431 accounts during Oct-Mar period: Cryptocurrency exchange WazirX blocked over 2,431 accounts based on its internal transaction monitoring process or directives from the law enforcement agencies during October 2022 to March 2023 period, the company said in its biannual transparency report.
■ These People Avoid the TikTok App, Not the TikTok Videos (WSJ)
■ Faster, cheaper: How ending the government monopoly improved Ethiopia’s internet (Rest of World)
■ I Saw the Face of God in a Semiconductor Factory (Wired)
Also in this letter:
■ FAME II subsidies for two EV makers on hold
■ Ola Electric in talks to raise $250-300 million
■ Around 45,000 AI job openings in India
IT firms stare at 30 bps revenue hit from US banking crisis
Indian IT majors such as Tata Consultancy Services and Infosys could take an up to 30 basis points hit on the revenue in the fourth quarter of FY23 due to their exposure to crisis ridden regional banks in the US, said analysts tracking the sector.
Catch up quick: ET reported on Tuesday that the banking crisis could affect tech spending in India, affecting major IT firms like TCS, Infosys, Wipro, and LTIMindtree, since they are majorly involved with US regional banks.
Spillover effect: Experts also warned that the crisis may spill over from the banking, financial services, and insurance (BFSI) sectors to other verticals such as retail and hitech in the latter part of FY24. According to industry body Nasscom, BFSI dominates enterprise tech spend and offshore outsourcing, contributing about 41% of industry revenue in this fiscal year through March.
Revenue share from BFSI: Wipro has the highest revenue share from BFSI at 35%, followed by TCS (31.5%), Infosys (29.3%) and HCLTech (20%).
Spotify India wants to double down on ad revenues: Amarjit Singh Batra
Swedish music streaming platform Spotify, which launched its audio-streaming services in India in 2019, is looking to bulk up its sales team fivefold, in a bid to increase its advertising revenue, a senior company executive told ET.
Advertising push: In India, Spotify has achieved a revenue ratio of 50-50 for subscriptions and advertising, which is starkly different from its global revenue mix that has typically favoured paying users. Around 85% of the company's revenue worldwide comes from paid users, but this is gradually changing. In the fourth quarter of last year, 14% of its total revenue came from advertising.
Podcast investments questioned: The company has been sustaining losses due to its heavy investments in podcasts and original content. The company’s heavy investments behind podcasts have come under scrutiny as analysts have questioned as to when it will result in earning revenues for the firm.
India market: India is among the top five markets for Spotify in terms of user base and engagement, Amarjit Singh Batra, managing director, India and general manager, South Asia, Middle East and Africa, Spotify, said. To boost user numbers in India, the platform has utilised product optimization and expanded payment options, such as incorporating the widely used Unified Payments Interface (UPI).
FAME-II sops of two EV makers on hold; govt seeks localisation proof
The government has ceased processing pending claims for subsidies under the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) - II scheme for two electric vehicle (EV) manufacturers.
What’s the matter? The pause will stay until the companies provide adequate evidence demonstrating their compliance with the FAME-II requirements. Minister of state for heavy industries, Krishan Pal Gurjar informed the Lok Sabha of the development in a written response. He was responding to a question raised about whether subsidies have been put on hold following complaints about EV makers not complying with the localisation norms.
Catch up quick: ET reported on October 7 that Hero Electric and Okinawa have been served notices by the government. According to the FAME website, models of all these companies have been excluded from availing of the subsidy.
The allegations: Gurjar stated that the ministry of heavy industries has received complaints of subsidy misappropriation due to the violation of localisation norms. Hero Electric and Okinawa have both been accused of using mostly imported components in their vehicles, falsely claiming them to be locally sourced to qualify for subsidies.
Tweet of the day
Ola Electric in talks to raise $250-300 million in fresh funding round
Bhavish Aggarwal-led Ola Electric is in talks to raise a fresh round of $250-300 million in growth equity to expand two-wheeler operations and fund its planned battery facility, said people with knowledge of the matter.
Previous funding: Ola Electric raised $200 million in January last year from investors such as Tekne Private Ventures, Alpine Opportunity Fund, Edelweiss and others at a $5 billion valuation. The company is expecting an up round that may see its valuation go up to $6.5-7 billion, based on the expectation of turning ebitda positive from FY24.
More details: Ola Electric is working with an advisor and has reached out to several sovereign wealth funds such as Qatar Investment Authority and Abu Dhabi Investment Authority as well as climate-focussed or energy transition funds like Blackrock and Blackstone among others. Management meetings have begun but discussions are preliminary and at a pre-term sheet stage, said the people cited above.
Milkbasket cofounder starts up again with Sorted, raises $5 million
Fresh fruits and vegetable supply chain startup, Sorted, which is founded by former Milkbasket cofounder, Anant Goel, has raised $5 million as a part of its ongoing seed funding round.
ET 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.
Around 45,000 AI jobs on offer in India; data, ML talent in top demand
There are 45,000 artificial intelligence job openings in India, with data scientists and ML engineers among the most sought after careers, as per a report released by TeamLease Digital.
Jobs in various industries: The report finds a wide variety of key job roles in the AI space across major industries, including healthcare: clinical data analyst, medical imaging specialist, health informatics analyst, among others.
Salary packages: According to the report, freshers who become data engineers can earn up to Rs 14 lakh per annum, ML engineers up to Rs 10 lakh, data scientists up to Rs 14 lakh, devops engineers up to Rs 12 lakh, data architects up to Rs 12 lakh, BI analysts up to Rs 14 lakh, and database admins up to Rs 12 lakh. Additionally, candidates with eight years of experience in similar fields can earn even higher salaries ranging from Rs 25 lakh to 45 lakh per annum.
Other Top Stories By Our Reporters
Outgoing TCS CEO Rajesh Gopinathan in line for advisory role: sources | Outgoing chief executive Rajesh Gopinathan may stay on in Tata Consultancy Services (TCS) in an advisory role, people familiar with the matter said.
Zomato Gold helps company reclaim market share from Swiggy: HSBC report: Zomato, since the relaunch of its loyalty programme, has started reclaiming the market share it had lost in the second half of 2022 to rival food delivery company Swiggy, HSBC Global Research said in a note.
WazirX blocks 2,431 accounts during Oct-Mar period: Cryptocurrency exchange WazirX blocked over 2,431 accounts based on its internal transaction monitoring process or directives from the law enforcement agencies during October 2022 to March 2023 period, the company said in its biannual transparency report.
Global Picks We Are Reading
■ These People Avoid the TikTok App, Not the TikTok Videos (WSJ)
■ Faster, cheaper: How ending the government monopoly improved Ethiopia’s internet (Rest of World)
■ I Saw the Face of God in a Semiconductor Factory (Wired)
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