 Morning Dispatch |
FDs fuel plastic dreams; PhysicsWallah revises DRHP
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Happy Monday! Banks and fintechs launch low-limit secured credit cards to grow users. This and more in today's ETtech Morning Dispatch.
Also in the letter:
■ India Semiconductor Mission 2.0
■ Oyo parent becomes Prism
■ Proactive pitches boost IT
Banks and fintechs are tearing up the credit card rulebook. To bring more users into the formal credit net—without taking on too much risk—they are launching secured cards with starting limits as low as Rs 90, industry executives told us.
That's a dramatic drop from the Rs 25,000–50,000 minimum, and these executives say it is helping first-time borrowers or those with poor credit histories, one tiny swipe at a time.
By the numbers: Roughly 1–1.1 million credit cards are issued in India each month. Of these, about 100,000 are secured by fixed deposits. These new-age, low-limit cards make up a growing slice of that.
Who is issuing?
Why it matters: Low-limit, FD-backed cards are a safe bet for issuers and a foot in the door for consumers. With RuPay cards now accepted on UPI, users can shop online, pay offline, and build a credit trail. Fintechs see these as starter kits for credit newbies.
Also Read: NPCI ups RuPay credit card play against rivals
Industry headwinds: Credit card players are navigating headwinds, from tighter unsecured lending norms to rising NPAs. In this context, the micro-credit model provides a low-risk growth lever without overexposing lenders.
Also Read: As regulatory curbs seem to ease fintechs bet on festive spark in unsecured lending play
(L-R) Prateek Maheshwari and Alakh Pandey, founders, Physicswallah
Edtech unicorn PhysicsWallah has fired the starting gun on its public debut, filing an updated draft red herring prospectus (DRHP) for its initial public offering (IPO) with the Securities and Exchange Board of India (Sebi) to raise Rs 3,820 crore. This could make it the first Indian edtech firm to list after the sector's post-Byju’s reality check.
Physicswallah, a nominee in the Startups of the Year category at The Economic Times Startup Awards 2025, received Sebi's approval for the IPO on July 18.
Offering details:
Where's the money going:
Strong financial performance: PhysicsWallah clocked revenue of Rs 2,886 crore in FY25, up from Rs 1,940 crore the previous year. Losses shrank significantly to Rs 243 crore, down from Rs 1,131 crore in FY24.
Growth in offline channel:
Also Read: PhysicsWallah first edtech firm to get Sebi's nod for IPO; six other issues approved
India is moving fast on chips. Following the first phase of the India Semiconductor Mission (ISM 1.0), the government is now preparing to launch ISM 2.0, marking a more comprehensive and ambitious push to strengthen the country’s semiconductor ecosystem.
Driving the news: A cabinet note for ISM 2.0 is expected by the end of October, with applications likely to open before the year wraps up, according to government and industry sources.
ISM 2.0: The next phase will widen its scope across the semiconductor value chain – from compound semiconductor fabs and display fabs to capital equipment manufacturing, specialty chemicals and gases, advanced packaging, and even fabless design startups.
Bigger incentives: Industry groups have urged the government to double the programme's outlay to $20 billion (approximately Rs 1.76 lakh crore) to attract big-ticket investments. Even if the final allocation matches the $10 billion budget of ISM 1.0, the rupee amount will need to rise due to currency depreciation.
Incentive breakdown:
ISM 1.0: Launched in 2021, ISM 1.0 committed Rs 76,000 crore to semiconductor self-reliance through a production-linked incentive scheme. So far, the government has approved 10 key projects and allocated Rs 65,000 crore, covering initiatives like display fabs, compound semiconductor units, and ATMP and OSAT facilities.
Also Read: India will command major share of $1 trillion global semiconductor market: PM Narendra Modi
In related news, a nine-member Indian semiconductor and vision hardware consortium led by Kaynes Semicon has clinched contracts to supply more than five lakh indigenous dash and surveillance cameras by this fiscal year.
The device will be fully designed, packaged and manufactured in India. They integrate image sensors, optical lenses, AI-based microcontrollers, and advanced system-on-chip (SoC) technology, cutting reliance on imported modules and intellectual property.
Oyo CEO Ritesh Agarwal
Oyo changes corporate entity name to Prism: Oravel Stays, the parent company of the hospitality startup Oyo, announced on Sunday that it has rebranded as Prism. The IPO-bound company explained that the new name aims to emphasise its broader global portfolio.
Proactive pitch is new sales driver for Indian IT cos: The traditional lengthy and repetitive Requests for Proposal (RFP) are being replaced by proactive pitches. They now make up a third of new deal renewals, up from 10-15% two years ago, according to HfS Research.
IT firms' tariff worries: India's $283-billion IT services sector faces uncertainty over potential US tariffs on software exports. Major companies such as TCS, Infosys, HCLTech, and Wipro generate over 60% of their revenue from the US, although most of their workforce remains in India.
■ MAGA populists call for holy war against Big Tech (The Verge)
■ Inside the AI era’s favourite hacker houses (The Information)
■ Clingy chatbots, AI recruiters and other new research findings (Rest of World)
Also in the letter:
■ India Semiconductor Mission 2.0
■ Oyo parent becomes Prism
■ Proactive pitches boost IT
Banks, fintechs cut credit card cap to secure more users
Banks and fintechs are tearing up the credit card rulebook. To bring more users into the formal credit net—without taking on too much risk—they are launching secured cards with starting limits as low as Rs 90, industry executives told us.
That's a dramatic drop from the Rs 25,000–50,000 minimum, and these executives say it is helping first-time borrowers or those with poor credit histories, one tiny swipe at a time.
By the numbers: Roughly 1–1.1 million credit cards are issued in India each month. Of these, about 100,000 are secured by fixed deposits. These new-age, low-limit cards make up a growing slice of that.
Who is issuing?
- Super.money + Utkarsh Small Finance Bank: Their co-branded offering, Supercard, requires a fixed deposit and offers a credit limit as low as Rs 90. Super.money is backed by Flipkart’s venture arm.
- Paisabazaar + SBM Bank India: Their Step Up card requires a fixed deposit of just Rs 2,000 and offers credit of up to 90% of that value.
Why it matters: Low-limit, FD-backed cards are a safe bet for issuers and a foot in the door for consumers. With RuPay cards now accepted on UPI, users can shop online, pay offline, and build a credit trail. Fintechs see these as starter kits for credit newbies.
Also Read: NPCI ups RuPay credit card play against rivals
Industry headwinds: Credit card players are navigating headwinds, from tighter unsecured lending norms to rising NPAs. In this context, the micro-credit model provides a low-risk growth lever without overexposing lenders.
Also Read: As regulatory curbs seem to ease fintechs bet on festive spark in unsecured lending play
PhysicsWallah files updated DRHP for Rs 3,820-crore IPO
Edtech unicorn PhysicsWallah has fired the starting gun on its public debut, filing an updated draft red herring prospectus (DRHP) for its initial public offering (IPO) with the Securities and Exchange Board of India (Sebi) to raise Rs 3,820 crore. This could make it the first Indian edtech firm to list after the sector's post-Byju’s reality check.
Physicswallah, a nominee in the Startups of the Year category at The Economic Times Startup Awards 2025, received Sebi's approval for the IPO on July 18.
Offering details:
- Fresh issue: Rs 3,100 crore.
- Offer for sale: Rs 720 crore, equally split between cofounders Alakh Pandey and Prateek Maheshwari, who plan to offload Rs 360 crore worth of shares each.
Where's the money going:
- Rs 460 crore to set up new offline and hybrid centres.
- Rs 548 crore for lease payments on existing centres
- Rs 81 crore to invest in subsidiaries.
- The remaining funds will be used for acquisitions and other business needs.
Strong financial performance: PhysicsWallah clocked revenue of Rs 2,886 crore in FY25, up from Rs 1,940 crore the previous year. Losses shrank significantly to Rs 243 crore, down from Rs 1,131 crore in FY24.
Growth in offline channel:
- Offline revenue now contributes 46.85%, nearly matching the online share at 48.6%.
- Average offline ARPU (average revenue per user) rose to Rs 4,040.
- Online collections inched up to Rs 368.
Also Read: PhysicsWallah first edtech firm to get Sebi's nod for IPO; six other issues approved
Govt to fast-track next round of India Semiconductor Mission
India is moving fast on chips. Following the first phase of the India Semiconductor Mission (ISM 1.0), the government is now preparing to launch ISM 2.0, marking a more comprehensive and ambitious push to strengthen the country’s semiconductor ecosystem.
Driving the news: A cabinet note for ISM 2.0 is expected by the end of October, with applications likely to open before the year wraps up, according to government and industry sources.
ISM 2.0: The next phase will widen its scope across the semiconductor value chain – from compound semiconductor fabs and display fabs to capital equipment manufacturing, specialty chemicals and gases, advanced packaging, and even fabless design startups.
Bigger incentives: Industry groups have urged the government to double the programme's outlay to $20 billion (approximately Rs 1.76 lakh crore) to attract big-ticket investments. Even if the final allocation matches the $10 billion budget of ISM 1.0, the rupee amount will need to rise due to currency depreciation.
Incentive breakdown:
- Silicon wafer fabs will receive the largest share of subsidies.
- Compound semiconductor units, being less capital-intensive, will see smaller incentives.
- Fabless design companies and MSMEs will get targeted funding under the new plan.
ISM 1.0: Launched in 2021, ISM 1.0 committed Rs 76,000 crore to semiconductor self-reliance through a production-linked incentive scheme. So far, the government has approved 10 key projects and allocated Rs 65,000 crore, covering initiatives like display fabs, compound semiconductor units, and ATMP and OSAT facilities.
Also Read: India will command major share of $1 trillion global semiconductor market: PM Narendra Modi
Indian semicon consortium bags deal for 5 lakh indigenous cameras
In related news, a nine-member Indian semiconductor and vision hardware consortium led by Kaynes Semicon has clinched contracts to supply more than five lakh indigenous dash and surveillance cameras by this fiscal year.
The device will be fully designed, packaged and manufactured in India. They integrate image sensors, optical lenses, AI-based microcontrollers, and advanced system-on-chip (SoC) technology, cutting reliance on imported modules and intellectual property.
Other Top Stories By Our Reporters
Oyo changes corporate entity name to Prism: Oravel Stays, the parent company of the hospitality startup Oyo, announced on Sunday that it has rebranded as Prism. The IPO-bound company explained that the new name aims to emphasise its broader global portfolio.
Proactive pitch is new sales driver for Indian IT cos: The traditional lengthy and repetitive Requests for Proposal (RFP) are being replaced by proactive pitches. They now make up a third of new deal renewals, up from 10-15% two years ago, according to HfS Research.
IT firms' tariff worries: India's $283-billion IT services sector faces uncertainty over potential US tariffs on software exports. Major companies such as TCS, Infosys, HCLTech, and Wipro generate over 60% of their revenue from the US, although most of their workforce remains in India.
Global Picks We Are Reading
■ MAGA populists call for holy war against Big Tech (The Verge)
■ Inside the AI era’s favourite hacker houses (The Information)
■ Clingy chatbots, AI recruiters and other new research findings (Rest of World)
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