This and more in today’s edition of ETtech Morning Dispatch.
Also in this letter:
■ Flipkart gets Rs 1,700 crore tax relief
■ Indian startups had deposits worth $1 billion in SVB: MoS IT
■ SaaS firm Freshworks undertakes fresh round of layoffs
Big rejig: TCS names K Krithivasan CEO designate as Rajesh Gopinathan unexpectedly resigns
After a 22-year stint with TCS, chief executive officer (CEO) and managing director (MD) Rajesh Gopinathan has resigned “to pursue other interests”.
Under his tenure the IT services major’s share rose over 160%. Gopinathan’s resignation will be effective on September 15, 2023, it said.
Quote, Unquote: N. Chandrasekaran, chairman, TCS, said: “I have had the pleasure of working with Rajesh for the past 25 years….Over the last six years, Rajesh has provided strong leadership as the MD & CEO and has laid the foundation for the next phase of TCS’ growth with significant investments in cloud, agile and automation to help clients accelerate their transformation…”
Rajesh Gopinathan, MD & CEO, TCS, said: “I have thoroughly enjoyed my exciting 22 year tenure at TCS. It has been a pleasure working closely with Chandra, who has mentored me through this entire period. The last six years of leading this iconic organization have been most enriching and fulfilling, adding over $10Bn in incremental revenues and over $70 billion increase in market capitalisation.”
Who is K Krithivasan? The IT major informed that K Krithivasan, president and global head of the banking, financial services, and insurance (BFSI) business group at TCS, has been appointed as the CEO designate, effective March 16, 2023.
After notices, e-pharmacies look to make a case to government
Over a dozen online pharmacies have started reaching out to the health ministry to seek an audience and put across their viewpoint to explain their stance over show-cause notices issued to them last month over sale of drugs in alleged violation of norms, top executives said.
What’s the government doing? The health ministry has revised the draft of the New Drugs, Medical Devices, and Cosmetics Bill to include a clause that empowers the government to “regulate, restrict or prohibit” any sale, stocking or distribution of any drug by online mode, by issuing a notification.
What’s the background? On January 23, the All India Organisation of Chemists and Druggists (AIOCD), which represents 12 lakh small retail pharmacists across the country, wrote to the Prime Minister’s Office giving an advance notice of its plan to strike from February 15.
E-pharmacies respond: In written representations to the government sent following the show-cause notices, companies argued that the notices served by the drug regulator were “a cause of anxiety” for the industry. “The recent show cause notice may cause regulatory uncertainty at ground level in several states.
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.
Flipkart gets Rs 1,700 crore tax relief from Bengaluru bench of tax tribunal
Ecommerce giant Flipkart received a tax relief of Rs 1,700 crore after the Bengaluru bench of the Income Tax Appellate Tribunal (ITAT) allowed its appeal seeking tax deductions on its expenses related to employee stock option (Esop) and marketing expenses.
Details: The ITAT ruling comes more than a month after the Karnataka High Court granted interim relief to Flipkart in the same case. The Income Tax department had capitalised discounts as marketing intangibles and disallowed Esops, amounting to about Rs 4,500 crore and Rs 180 crore, respectively for the two assessment years 2016-17 and 2018-19.
Catch-up quick: The development comes months after Flipkart’s parent Walmart paid $1 billion in taxes to the government following its fintech arm PhonePe’s relocation to India from Singapore.The PhonePe separation had hit Walmart’s recent quarterly earnings, which contributed to an operating cost increase of 2.6%.
The tax relief also comes at a time when Flipkart has also been trying to cut costs amid a tough funding environment. ET reported on February 23 that the top 30% of employees at the company, which includes the senior leadership, won’t receive any increments this year.
Indian startups had deposits worth $1 billion in SVB: MoS IT Rajeev Chandrasekhar
Indian startups had deposits worth $1 billion in the beleaguered California-based Silicon Valley Bank, MoS IT Rajeev Chandrasekhar informed while addressing a Twitter Spaces session.
Indian banks: After consulting with more than 450 representatives of the startup and investor ecosystem on Tuesday to assess the impact of the Silicon Valley Bank collapse, the minister wrote a letter to Finance Minister Nirmala Sitharaman with suggestions to startups on how to wade through the crisis, he said.
Indian banks could service startups with the same quality that they serve multi-billion dollar companies, the minister said he wrote in the letter to the FM.
More awareness needed: Chandrasekhar suggested that the government should raise awareness about the country’s banks and the International Financial Services Centre (IFSC) located at Gujarat’s GIFT City.
GIFT City banks offer foreign currency accounts for international transactions, and startups are collaborating with RBL Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, and HSBC to open accounts. The minister said an estimated $200 million has been transferred to GIFT City from Silicon Valley Bank.
TWEET OF THE DAY
SaaS firm Freshworks undertakes fresh round of layoffs
Nasdaq-listed software firm Freshworks has undertaken a fresh job cuts in a bid to improve operational and organisational efficiencies. Freshworks has not conducted organisation-wide layoffs and continues to hire for open positions, company’s spokesperson told ET.
Earlier layoffs: In December 2022, the company had fired 90 employees globally, out of which 60 were from its India team. The software-as-a-service (SaaS) provider, headquartered in San Mateo, California, has a workforce of over 5,000 employees spread across its worldwide offices.
Recent exits: Last week, Freshworks said its cofounder and chief technology officer (CTO) Shanmugam Krishnasamy quit the company in September. Krishnasamy, who quit after 11 years with the firm, handed his responsibilities to chief product officer (CPO) Prakash Ramamurthy who leads both product and engineering teams, a company spokesperson had told ET.
Other Top Stories By Our Reporters
Open mobility app Namma Yatri seeks citizens’ help to improve offering: The builder of the auto rickshaw booking mobile application Namma Yatri is seeking public participation to help it match the service and user experience offered by tech companies like Ola, Uber and Rapido. Juspay Technologies is seeking participation from coders, policymakers and other stakeholders to better the product it has developed for Bengaluru’s Auto Rickshaw Drivers Union (ARDU).
ETtech Done Deals
D2C fashion firm Zouk raises $3 million led by Stellaris Venture: Direct-to-commerce (D2C) fashion brand Zouk said it has raised $3 million led by Stellaris Venture Partners and saw participation from Sharrp Ventures, JJ Family Office, Deutsche Bank India CEO Dilip Khandelwal, Atomberg founder Manoj Meena and founders of Sugar Cosmetics Vineeta Singh and Kaushik Mukherjee.
Solartech platform Aerem raises $5 million: Solartech platform Aerem on Thursday said it has raised $5 million (Rs 41 crores) in pre-series A round led by climate-tech investor Avaana Capital. The round also saw follow-on participation from Blume Ventures and it includes debt financing of $1.5 million from prominent financial institutions.
Global Picks We Are Reading
■ GPT-4 is as astonishing as it is unnerving (FT)
■ Crypto Faces a Banking Crisis. For Some, It’s a Conspiracy (Wired)
■ TikTok CEO’s Message to Washington: A Sale Won’t Solve Security Concerns (WSJ)
(Graphics & illustrations by Rahul Awasthi)
