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H-1B fee hike risks; PhonePe’s losses shrink
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The H-1B visa fee hike threatens education lenders with riskier loans. This and more in today’s ETtech Top 5.Also in the letter:■ Rentomojo’s IPO prep■ Swiggy’s cash crunch■ TikTok’s new power playersH-1B visa fee hike to hit banks, NBFCs with high education loan exposure Indian lenders with high exposure to education loan books are staring at fresh risks after the US moved to slap a steep $100,000 fee on new H-1B visa applications. This sudden spike in visa costs could shake up India’s Rs 2 lakh crore education loan market, particularly the chunk tied to students eyeing the US.Why it matters:Nearly 30-40% of outstanding education loans are linked to students heading to the US.A sharp rise in visa-related costs could scare off future applicants and undermine job prospects for current ones, potentially pushing up default rates.NBFCs focused on education finance, often concentrated in this borrower segment, are especially vulnerable. By the numbers:Indian banks’ education loan exposure stood at Rs 1.4 lakh crore at the end of July, up 15% year-on-year.But that growth is already losing steam, down from 19% a year earlier.Expert view: “If the visa fee is implemented without moderation, the sector would face rising delinquencies, and some business models, particularly those highly concentrated in this segment, could come under stress,” said Prakash Agarwal of Gefion Capital.Also Read: Steep H-1B visa fee hike casts shadow over future prospects of studentsTCS, Infosys, Tech Mahindra & other IT stocks plunge after Trump’s H-1B visa fee hike The US visa fee bombshell also rattled Indian tech stocks on Monday. The Nifty IT index slid 3%, with mid-tier companies taking it on the chin. TCS, Infosys, and Tech Mahindra saw up to 6% declines as markets reacted to higher talent acquisition costs. Outlook: Analysts expect a short-term jolt but warn of long-term structural pain if US hiring stays expensive. Mid-sized IT firms that depend on new H-1B approvals could see margin erosion of 100-400 basis points. Bigger players like TCS and Infosys may absorb the hit better.Zoom out: IT stocks have already had a rough 2025. TCS is down 23% year-to-date, Infosys 18%, and Wipro 14.6%. The latest fee hike could stall any hopes of a sustained rebound.Also Read: Indian IT, professionals to feel the heat from latest H-1B shock: What you need to knowPhonePe narrows loss in FY25 as revenue jumps 40% to Rs 7,115 crore Walmart-backed PhonePe narrowed its FY25 loss by 13% to Rs 1,727 crore as revenue jumped 40% to Rs 7,115 crore, according to filings made with the Registrar of Companies (RoC).Key financials: • Expenses: Rs 9,394 crore (up 21%) • Payment processing charges: Rs 1,688 crore (45%) • Employee costs: Rs 4,097 crore (up 14%)Revenue mix: • Payments: Rs 6,300 crore (85% of total operating revenue) • Insurance & lending distribution: Rs 558 crore • Stockbroking, mutual fund distribution & marketplace: Rs 57 croreGrowth stage: PhonePe is India’s largest UPI platform, processing over 360 million transactions daily. The company is preparing for an initial public offering (IPO) later this year and has already become a public company. The RBI granted it final approval to operate as a payment aggregator last week, a crucial step in expanding its merchant network.Zoom out: Despite diversifying into credit, insurance, and wealth management, PhonePe remains rooted in payments. With 650 million registered users, a 45-million-merchant network, and an annualised total payment value of Rs 150 lakh crore, its IPO will gauge the public markets’ interest in the company.Also Read: PhonePe’s 5% dilemma: Payments still dominate revenue as it gets IPO-readyWearable startup Ultrahuman turns profitable in FY25; revenue jumps fivefold Mohit Kumar, CEO, UltrahumanUltrahuman has logged its first full-year profit, fuelled by booming demand for its smart rings and a growing subscriber base. The fitness tech startup said on Monday it saw traction in both its flagship wearable and health subscription offerings.Key financials: Ultrahuman’s operating revenue surged 5.4x to Rs 565 crore in FY25, up from Rs 105 crore in the previous year. Net profit came in at Rs 73 crore, marking a turnaround from a Rs 39 crore loss in FY24.Furniture, appliances rental startup Rentomojo picks bankers for IPO, sources say Geetansh Bamania, CEO, RentomojoFurniture and appliances rental startup Rentomojo is gearing up for a public listing in FY27, with IIFL and Motilal Oswal tapped as IPO bankers, sources told ETtech.IPO timing: The move follows four consecutive years of profit. As competitors shut down or were acquired, Rentomojo remained the last scaled player in the rental market, looking towards its IPO window. Talking numbers (FY25, estimates): • Operating revenue: Rs 260-270 crore (up 40% YoY) • Net profit: Rs 40 crore (up from Rs 22.1 crore in FY24) • Ebitda: Rs 92 crore (vs Rs 66 crore in FY24; Rs 27 crore in FY23)Also Read: ET Startup Awards 2024: Comeback Kid | Rentomojo shows off scale in its Act-II showstopperZoom out: Founded in 2014, the Accel and Chiratae-backed firm weathered a crowded market that saw exits and consolidation, most notably Furlenco’s acquisition by Sheela Foam in 2023. Rentomjo has raised Rs 400 crore so far, with its latest valuation pegged at Rs 850–900 crore in early 2024.The backdrop: Rentomojo joins a wider queue of consumer internet firms preparing for the bourses — including Meesho, Boat, Lenskart, Groww, PhysicsWallah, Capillary, and Curefoods.Also Read: Tide secures $120 million from TPG, valuation jumps to $1.5 billionSwiggy needs $500 million fundraise, says JM Financial after downgrading stock to ‘Reduce’ Sriharsha Majety, group CEO, SwiggyFood and grocery delivery platform Swiggy needs to raise over $500 million to fuel its quick commerce expansion and plug a widening cash gap, according to brokerage firm JM Financial.Cash reserve dryingSwiggy’s war chest is depleting rapidly. JM Financial projects a sharp Rs 1,000 crore drop in net cash balance quarter-on-quarter, dropping to Rs 4,350 crore by September 2025.That’s down from Rs 5,354 crore in Q1 FY25, Rs 6,695 crore in Q4 FY24, and Rs 8,183 crore in Q3 FY24.In contrast, rival Eternal ended June with a hefty Rs 18,557 crore in cash, more than four times Swiggy’s projected stash. Also Read: ETtech Explainer: Swiggy’s losses balloon despite push to improve economicsRapido stake offloadSwiggy is now offloading its 12% stake in urban mobility player Rapido, which has moved into food delivery.Swiggy had invested Rs 1,050 crore into Rapido in 2022. Based on the latest fundraise, that stake is now Rs 1,400-1,500 crore.Competition increasingInstamart is growing, but not fast enough.Despite 100% year-on-year growth in gross order value, it is ceding ground to Blinkit, which added over 200 dark stores in Q1 FY25, compared to just 42 by Instamart.With ecommerce majors Flipkart and Amazon muscling into the space, the battle for instant groceries is heating up.Also Read: Instamart’s market share growth is self-driven, not rival-led: Swiggy group CEO MajetyTrump reveals Murdochs and Dell could potentially take part in TikTok deal US President Donald Trump has thrown a few heavyweight names into the ring as potential backers of an American consortium to take control of TikTok. Speaking to Fox News, Trump said Rupert Murdoch, his son Lachlan, and tech billionaire “could be in the group” alongside Oracle founder Larry Ellison, who is already on board.What Trump said: “I think they’re going to be in the group… Really great people, very prominent people… And they’re also American patriots,” Trump told Fox News. He also acknowledged TikTok’s role in helping him reach younger voters in the 2024 race, admitting he’s “a little prejudiced” in favour of the app.Where the deal stands: Under the current plan, Oracle would manage TikTok’s data and security in the US, while Americans would hold six of the seven seats on the new board. On Friday, Trump also discussed the matter with his Chinese counterpart, Xi Jinping. After another deadline extension, both sides have until December 16 to finalise the deal. Also Read: US-China TikTok deal: All you need to knowThe broader context: Lawmakers in Washington have long raised concerns over TikTok’s Chinese ownership through ByteDance. Their fear? Beijing could sway public opinion by manipulating the app’s powerful algorithm. The US Congress has already passed legislation for a US ban starting January 2025, though Trump has repeatedly extended the clock.
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