RBI's new directive to NBFCs; Oyo's third IPO attempt

Time of India

27-05-2025

RBI's new directive to NBFCs; Oyo's third IPO attempt
Also in the letter:
RBI tightens default loss guarantee rule; NBFCs to exclude cover on fintech-sourced loans
What's changing?
Strengthen underwriting practices.
Curb systemic risks.
Avoid over-reliance on fintechs.
Who's affected?
MobiKwik
Paytm
Moneyview
When's the deadline?
The impact:
NBFCs: Higher provisions, leading to reduced appetite for fintech-originated credit.
Higher provisions, leading to reduced appetite for fintech-originated credit. Fintechs: Likely decline in originations and income.
Likely decline in originations and income.
Borrowers: Stricter access to unsecured credit.
Oyo to meet bankers next week for third IPO attempt; eyes $5-7 billion valuation
Verbatim:
More details:
The company is in talks with Indian and global banks. It aims to file its draft red herring prospectus (DRHP) between August and September, with a public listing targeted for March or April 2026, according to sources.
This will be Oyo's third attempt at going public. It first filed with the Securities and Exchange Board of India in 2021, aiming for an Rs 8,430 crore IPO, but withdrew in 2022.
A second filing, made confidentially in 2023, was also withdrawn in 2024.
Recent fundraise:
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Info Edge Q4 revenue rises 14% to Rs 750 crore; net profit surges 8x to Rs 678 crore
Financials:
Operating revenue (Q4): Rs 750 crore.
Rs 750 crore. Net profit (Q4): Rs 678 crore, up from Rs 88 crore a year ago.
Rs 678 crore, up from Rs 88 crore a year ago. Revenue (FY25): Rs 2,849 crore, up 12% YoY.
Rs 2,849 crore, up 12% YoY. Net profit (FY25): Rs 1,310 crore, more than double the Rs 594 crore reported in FY24.
Rs 1,310 crore, more than double the Rs 594 crore reported in FY24. Total expenses (FY25): Rs 539 crore, compared to Rs 469 crore in FY24.
Employee benefits: Rs 331 crore. Advertising and promotion costs: Rs 100 crore.
Rs 539 crore, compared to Rs 469 crore in FY24.
Revenue breakdown:
Recruitment solutions (including Naukri.com) : Rs 542 crore, up 13% YoY.
: Rs 542 crore, up 13% YoY. 99Acres (real estate portal): Rs 106 crore, up 14%.
Rs 106 crore, up 14%.
Other businesses (including Jeevansathi.com and Shiksha.com) : Rs 101 crore, up nearly 20%.
Also Read:
Sarvam AI unveils multilingual LLM; low traction poses questions on India's AI scene
About the model:
The model supports a hybrid reasoning mode for tackling complex logical reasoning problems, as well as mathematical and coding tasks.
Additionally, it features a non-think mode for general-purpose conversation.
According to the company, Sarvam M outperforms similarly sized models on coding and math benchmarks.
No traction:
Frinks AI raises $5.4 million:
Contineu raises $1.2 million:
Technology workforce in Bengaluru crosses one-million mark; IT city among 12 global tech hubs: CBRE
Details:
The city ranks fourth among the 12 tech markets in terms of the share of its working-age population.
75% of Bengaluru's falls in this productive age group.
Between 2019 and 2024, Bengaluru saw a 2.4% increase in its working population.
The city also leads in terms of AI development talent.
In 2024, Bengaluru attracted 140 venture capital (VC) deals worth $3.3 billion.
The RBI has tightened rules on default loss guarantees (DLGs), a move that is likely to hit digital lenders hard. This and more in today's ETtech Top 5.■ Info Edge Q4 results■ Sarvam's LLM gets muted response■ Bengaluru tech workforce crosses 1 millionThe Reserve Bank of India (RBI) has directed non-banking finance companies (NBFCs) to exclude default loss guarantees (DLGs) provided by fintech partners when provisioning for bad loans.NBFCs will no longer factor in the typical 5% guarantee from digital lending partners to reduce provisioning on stressed loans. This marks a significant shift that could dent both origination volumes and fee income for fintechs.The RBI wants NBFCs to:The move follows cases where fintechs failed to honour DLGs, leaving NBFCs exposed to losses.Digital lending partners such as:These firms act as lending service providers and typically offer DLGs of up to 5%, often backed by fixed deposits lien-marked in favour of NBFCs. These guarantees act as credit cushions and are usually factored into expected credit losses (ECL) calculations.NBFCs must comply by September 30, treating fintech-originated loans as if there is no credit enhancement. Some NBFCs have already begun adjusting provisions from Q4 FY25.This directive is part of the RBI's broader crackdown on hidden risks in India's rapidly growing digital lending ecosystem. It also serves as a nudge for NBFCs to shoulder the risk they underwrite, instead of outsourcing it.Ritesh Agarwal, CEO, OyoOravel Stays Ltd, the parent company of hospitality startup Oyo, is set to formally review proposals from merchant bankers next week as it prepares for a fresh attempt at an initial public offering (IPO), according to multiple people familiar with the development.'During the preliminary discussions, some bankers proposed that the company could get valued as high as $10 billion for its public issue, but the company's realistic expectation is around $6-7 billion,' a source said.In August, Oyo raised Rs 1,457 crore from a group of investors at a significantly reduced valuation. In December, it secured $825 million in debt from Deutsche Bank to fund its $525 million acquisition of US motel chain Motel 6.ETtech Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and employees.Interested? Reach out to us at [e-mail] to explore sponsorship opportunities.Sanjeev Bikhchandani, cofounder, Info EdgeNaukri.com parent Info Edge posted a 14% year-on-year (YoY) increase in operating revenue for the March quarter, driven by robust growth across both recruitment and non-recruitment businesses.Indian AI startup Sarvam AI, the first company chosen by the government to build a homegrown foundational model, has launched its open-source large language model (LLM) . However, the early reception has been muted, with only a few hundred downloads in the initial days.Sarvam claims its LLM, Sarvam M, performs well on benchmarks in mathematics, programming, and 11 Indian languages, including Hindi, Gujarati, Kannada, and Malayalam.The model, released on Hugging Face, recorded just over 300 downloads at launch. As of May 27, the number had increased to 1,200. The lukewarm response has reignited debate over India's place in the global AI race, particularly with rivals such as DeepSeek and OpenAI.Frinks AI has raised $5.4 million in a new funding round led by Prime Venture Partners. Founded by IIT Hyderabad alumni Aditya Agrawal, Dharmgya Sharma, and Subhra S Bhattacherjee, Frinks AI is a deep-tech startup developing next-generation vision AI systems for industrial automation and quality control.Deeptech startup Contineu has raised $1.2 million in a seed funding round led by SenseAI Ventures, with Piper Serica Angel Fund participating. Founded in 2023, the startup automates data entry on construction sites through its platform, utilising helmet-mounted cameras and 3D computer vision models.Bengaluru is now among the top 12 global technology hubs, joining the ranks of Beijing, Boston, London, New York, and Toronto, as its technology workforce has crossed the one million mark.According to a report by real estate consultant CBRE, Bengaluru's tech talent scale rivals that of the US hubs of San Francisco and New York.