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UPI’s rural push; India as software IPO destination

2 weeks ago 44

Happy Wednesday! The country’s central bank wants more rural users to log into Unified Payments Interface (UPI). This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ Public-private cloud for chip designs
■ Mid-cap IT cos in billion-dollar club
■ Indeed lays off 1,000 staff

UPI Growth 2.0: Efforts on to crack DBT code

UPI YEAR ENDER-digital payments_transaction_THUMB IMAGE_ETTECH

The Reserve Bank of India and the country’s commercial banks are looking at rural India for the next phase of growth in Unified Payments Interface (UPI).

Driving the news: According to people in the know, the National Payment Corporation of India (NPCI) is trying to bring local area banks into the UPI ecosystem to popularise the payment method in India’s villages. RBI, banks and NPCI are looking to get beneficiaries of DBT payments into the UPI fold, enabling them to pay for their daily needs digitally instead of withdrawing cash from their accounts.


Go deeper: NPCI is working with technology platform Sarvatra Technologies to enable cooperative banks, district cooperative banks and the like to go live on UPI. Once UPI handles are issued to their users, they will also onboard local merchants where these customers can pay via UPI.

Why does it matter: There are around 960 million debit cards in the country. But industry sources told us that there are around 300 million active UPI users in the country. To bring in the next 300 million users, local area banks that have capabilities to run debit cards are now trying to get RBI certificates to run mobile banking applications that will allow them to issue UPI handles to their users. Mandar Agashe, founder of Sarvatra Technologies, said they have enabled UPI payments for 242 of the 700 local banks they work with.

ETtech Opinion: India Ahoy! Here’s why it’s the new software IPO destination

IPO ETtech

Indian stock markets are welcoming technology companies like never before. It’s not just software firms with $100 million in annual revenues, 20% Ebitda margins and 30% growth that can go public in India.

What’s happening: While the likes of FirstCry and Cultfit will continue to go public, it’s software firms with global customer bases that are now set to take centerstage.

Big picture: India has seen a flurry of tech IPOs in the last few years, mostly from the likes of consumer technology companies such as Paytm and Zomato. This has been fueled by three factors:

  • Indian retail investors are hungry to invest in technology firms.
  • Many Indian mutual funds have a mandate to invest a certain percentage of their assets in technology.
  • The number of public tech firms in India is low, and low supply plus high demand creates the perfect storm.

Software firms next: Investors expect Capillary Technologies to be the first scaled software IPO in India, likely in the second half of 2025. Another name doing the rounds is Whatfix, which is said to be almost IPO-ready.

Read the full column by Gokul Rajaram here.

Govt eyes private-public cloud model for chip designs

semiconductor manufacturing THUMB IMAGE ETTECH

The government is mulling a proposal to set up a private-public cloud model for storing advanced semiconductor chips and packaging designs to provide startups, academics, micro, small and medium enterprises, and researchers easy access.

Driving the news: This could be housed under a new design centre of the India Semiconductor Research Centre proposed by the ministry of electronics and information technology, an official said.

The IT ministry wants to provide access to the designs to reduce the time-to-market from paper to shop floor for semiconductor ecosystem products, another official told ET.

Quote, unquote: “Companies spend considerable time and resources to develop new IC (integrated chip) or improved packaging design. Naturally, all of those IP-protected resources may not be immediately available. We are hoping to have some of these designs made available to small startups for research work,” the official said.

Other Top Stories By Our Reporters

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IT midcaps weather market storm to enter billion-dollar club: Despite one of the toughest demand environments for the $250-billion Indian IT industry, four smaller IT firms have entered the billion-dollar revenue group over the last five quarters. These include L&T group's LTTS, Coforge, Persistent Systems and Sonata Software.

ETtech Explainer: What is OpenAI's ChatGPT-4o all about? ChatGPT creator OpenAI announced the launch of GPT-4o, its newest flagship model, during a livestream on Monday. Claiming GPT-4o is "much faster," chief technology officer Mira Murati said it "improves capabilities across text, vision, and audio". Here’s all you need to know.

Job site Indeed cuts around 1,000 jobs in second layoff in two years: Indeed Inc. plans to cut about 1,000 employees, or roughly 8% of its workforce, the job-search website’s second culling in two years as it seeks to simplify its business in a cooling labor market.

Global Picks We Are Reading

■ What’s next in chips (MIT Technology Review)

■ Bumble is removing anti-celibacy ads following backlash (WSJ)

■ Google moves deepfake porn sites lower in Its search rankings (Bloomberg)

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