StartupTalky

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  • As the Company Looks to Raise $50–60 Million, Upgrad MD Mayank Kumar Steps Down

    According to a media report, managing director and cofounder of the edtech unicorn Upgrad, Mayank Kumar, has left his position as an executive to launch a new business. Last month, he began reducing his operational responsibilities at the Mumbai-based company. This step was taken to raise funds for his new venture, which focuses on sending talented Indian workers abroad, particularly for the healthcare industry.

    Ronnie Screwvala, the company’s founder and chairman, has been involved in the business more since Kumar left. According to a media report, Temasek-backed Upgrad is also nearing the completion of securing $50–60 million in capital from current investors at a flat valuation of $2.25 billion. Kumar owns 8% of the company, while Screwvala owns 44%. Despite Kumar’s exit from the company, the shareholding pattern remains unchanged.

    Upgrad’s IPO Plans

    Screwvala’s return coincides with the edtech company’s intentions to go public in India, where the serial entrepreneur’s increased involvement in the company could be advantageous to public market investors.

    Mayank has been discussing the notion of raising funds with investors and making pitches to them. He will then register the company, and, as the media report further informs, he has not had operational involvement since October. 

    India’s Edtech Scenario

    The edtech industry is currently undergoing a period of significant transformation. Recent turmoil at Byju’s and a broad restructuring in the higher education sector are significant factors. Upgrad’s revenue in FY24 increased by 25.54% to INR 1,715 crore from INR 1,366 crore the year before. Although Upgrad has expanded at a specific rate, a faster growth rate was the goal.

    As a result, Screwvala will now have more influence over important operational decisions. He will now focus more on the IPO plans that are imminent and businesses attempting to capitalise on the present surge in demand for new listings.

    Restricting of Upgrad

    The restructure at Upgrad was confirmed by Screwvala and Kumar. In October 2023, Ronnie and Kumar had a conversation about Mayank’s lack of involvement in the company’s daily operations and how he could play a more active role. Thus, since the beginning of this year, the two have switched positions at Upgrad, according to Kumar. He also informed further that he is still an 8% stakeholder and that he is not “going anywhere.”

    “Moving positions around during a company’s life cycle is exciting, and that is exactly what we have done. Since it has always been our goal to outlast everyone else and build for the long term, none of us are going anywhere. Since this field of skill development, workforce development, and lifelong learning is only getting started, Mayank and I have also assembled an extremely strong team of colleagues around us,” stated Screwvala.

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  • Expanding into Physical Locations, Paisabazaar Aims to Increase Secured Lending

    Listed PB Fintech subsidiary Paisabazaar, a digital credit marketplace, replicates sister company Policybazaar by creating a physical distribution channel of its own.

    In India, Paisabazaar is among the biggest platforms for credit transactions. Through online channels, it gives customers access to credit cards, unsecured personal loans, and other comparable products from banks and non-bank lenders. In order to facilitate the execution of such loan delivery, Paisabazaar hopes to establish a physical presence as it expands its secured credit distribution strategy.

    The chief executive officer of Paisabazaar, Naveen Kukreja, told a media outlet that the company has assembled a field team of over 100 employees in Delhi, Mumbai, and Bengaluru with the goal of focusing on secured credit products, including home loans and loans backed by real estate. Although they are still in the beta phases, it is also evaluating other products, such as loans secured by securities and automobiles. It plans to expand this team to 500 members by the end of the current fiscal year.

    Paisabazaar to Enhance Secured Credit

    In the near future, Paisabazaar hopes to raise the percentage of secured credit in its total disbursements from 15% of the previous fiscal year to 50%. It has already increased to 33% of all disbursals in the last several months.

    The company used to offer home financing as well, although customers had to check on its platform and usually closed the deal through the builders, the bank branch, or the real estate agent. With a physical presence now, the company intends to close that service delivery gap, according to Kukreja.

    This change in approach coincides with a moderation in Paisabazaar’s disbursals, which are essential to the company’s ability to generate income. In response to regulatory mandates, the broader ecosystem is moving towards secured products, and Paisabazaar is attempting to take a piece of that market.

    Quarterly Report

    Paisabazaar disbursed over 130,000 credit cards and INR 3,140 crore in loans in the first quarter of FY25. It had disbursed 140,000 credit cards and INR 3,542 crore in loans in the quarter that ended on June 30 of the previous year.

    Every institution develops a portfolio of both secured and unsecured assets as it expands. “We ultimately changed our approach six months ago when the RBI tightened the guidelines for unsecured credit,” according to Kukreja.

    Although Paisabazaar hopes to reach 50% of its disbursal volume with secured credit, the lower take rates, or fees, on secured loans mean that revenue profits will be lower. However, Kukreja stated that eventually, the business hopes to collaborate with lenders to develop products that will enable it to obtain residual income from its clientele.

    Expanding upon its broader financial services offering, Kukreja seeks to provide clients with a comprehensive financial wealth management choice by utilising account aggregator data and deep interfaces with several financial services platforms.

    PolicyBazaar Success Story – Buying Policies are Now Easy!
    PolicyBazaar is the largest online insurance aggregator in India. Know about PolicyBazaar’s Business model, funding, valuation, revenue, & more.
    StartupTalkyShubham Kumar

  • Ola Electric, Owned by Bhavish Aggarwal, Contracts EY for a Critical Service Overhaul

    Leading player in the electric two-wheeler market, Ola Electric, managed by Bhavish Aggarwal, has engaged EY India to manage its “service transformation” in the face of growing customer complaints, falling sales, and worsening after-sales service issues. The decision was made in response to growing demand on the business to enhance customer service.

    This multinational consulting business, EY, is anticipated to help the manufacturer of electric two-wheelers in a number of service-related capacities. According to sources cited by a media house, the focus will be on optimising inventory and spare part management as well as streamlining corporate operations.

    An Interim Three-Month Task

    A few weeks ago, Ola Electric hired about a dozen EY professionals for a three-month initiative. The report stated that the relationship might be extended based on the outcomes. Helping Ola enhance its procedures, inventory control, and local service availability is the aim, especially in regions with robust sales but inadequate service assistance. The most significant obstacle has been finding replacement components and service staff.

    According to the report, Bhavish Aggarwal is in charge of the entire process, indicating how important it is to the business plan.

    Ola’s Reaction to Growing Criticism

    With as many as 80,000 customer complaints each month going viral on social media and stories of Ola Electric vehicles collecting dust at repair locations, this calculated approach is a response to growing customer unhappiness. Both lawmakers and consumer watchdogs were drawn to the outcry.

    Ola Electric was recently served with a show-cause notice by the Central Consumer Protection Authority (CCPA), which included possible abuses of consumer rights, deceptive advertising, and unfair business practices. More than 10,000 outstanding after-sales service concerns were highlighted in the notification. Ola Electric has made plans to grow its network of service centres in response to these problems, with the goal of increasing the number from 400 to 1,000 by the end of the year. Industry experts caution that expanding the number of centres alone might not address the main problem. An analyst said, “Instead of growing, the company should concentrate on enhancing the quality of current service stations.”

    Ola’s Internal Issues and Diminishing Sales

    A spike in customer complaints about hardware flaws, software bugs, and after-sale service has been difficult for Ola Electric to handle. Sales and market share have decreased as a result in recent months. With three heads of service quitting in the last two months, the company’s high turnover rate worsens these problems. Ola Electric has had a brief increase in sales this month despite these setbacks because of extensive discounting. Based on statistics retrieved from the Vahan portal, the business had registered over 15,672 vehicles as of October 14, increasing its market share to 34%.

    Although this gives the manufacturer of electric vehicles some respite, analysts have cautioned that the surge is mostly due to the holiday season and substantial discounts, which may not be long-term viable. Furthermore, according to market analysts, this month’s sales numbers are still below those of previous months this year.

    The CCPA Has Issued a Show Cause Notice to Ola Electric Due to Deceptive Advertising
    Following the Central Consumer Protection Authority’s (CCPA) show-cause notice to the business on 7 September 2024, shares of newly listed Ola Electric Mobility dropped 6.17 percent in intraday trading to INR 85.21 on 8 September 2024.
    StartupTalkyNitin Konde

  • US Continues to Dominate Global FinTech Landscape in Q3 2024, Witnesses Funding of $2.7B

    US, 17 October 2024: Tracxn, a leading global SaaS-based market intelligence platform, has released its Geo Quarterly Report: US FinTech Q3 2024. The report, based on Tracxn’s extensive database, provides insights into the US FinTech space.

    The US boasts of a bustling FinTech landscape, with more than 7K funded companies and 137 active FinTech Unicorns. Though the US ranks first globally in terms of funding in the FinTech sector in Q3 2024, this is the least funded quarter in the past five years. Q4 2021 was the highest funded quarter in this space, after which the funding started to experience a steady decline.

    The US FinTech startup ecosystem raised $2.7 billion in Q3 2024, a 30% decline compared with $3.9 billion raised in Q3 2023 and a 40% decline from $4.5 billion in Q2 2024. Late-stage funding in Q3 2024 fell 32% to $1.3 billion, from $1.9 billion raised in Q3 2023. Early-stage investments stood at $1.2 billion in Q3 2024, a drop of 29% from $1.7 billion in Q3 2023. Seed-stage funding, too, fell 49% to $186 million from $364 million in Q3 2023.

    Three companies attracted funding of $200 million and above. Human Interest raised $267 million in a Series D round at a post-money valuation of $1.33 billion, while FLYR raised $225 million in a Series D round. Earned Wealth secured $200 million in a Series B round. Three other companies reported $100M+ rounds, with Aven becoming the only new unicorn in the third quarter of this year, after raising $142 million at a valuation of $1 billion.

    Finance and Accounting Tech, Payments, and Investment Tech were the top-performing sectors based on funding in Q3 2024 in this space. The Finance & Accounting Tech segment witnessed total funding of $643 million in Q3 2024, a drop of 34% compared to $967 million raised in Q3 2023.

    Funding raised by the Payments sector fell 22% to $573 million in Q3 2024 from $737 million in Q3 2023. Investment Tech companies raised a total funding of $547 million in Q3 2024, 18% lower than the $669 million raised in Q3 2023.

    The third quarter of 2024 was weak in terms of exits. None of the companies from the US FinTech sector went public in Q3 2024, as against one IPO each in Q3 2023 and Q2 2024. The number of acquisitions too, fell to 48 in Q3 2024 from 54 in Q3 2023 and 62 in Q2 2024. ShareFile was acquired by Progress at a price of $875 million, and Stronghold Digital Mining was acquired by Bitfarms for $175 million.

    Among US cities, San Francisco and New York City together accounted for 50% of the total funding raised by the sector in the third quarter of this year. FinTech startups based in San Francisco raised $750.2 million, while those headquartered in New York City and Santa Monica raised $610.1 million and $225 million.

    Y Combinator, Techstars, and a16z are the overall top investors in this space. Y Combinator, Castle Island Ventures & Plug, and Play Tech Center were the top seed-stage investors in Q3 2024, while Curql, Redpoint Ventures and Brewer Lane Ventures took the lead in early-stage investments.

    The US government is taking several initiatives to stimulate investment and innovation in the FinTech sector, which could give a boost to these startups in the coming years.

    (Data for Q3 2024 covers the period from July 1, 2024, to September 30, 2024) 

    All such reports are available on the Tracxn website: tracxn.com.

    About Tracxn 

    Tracxn Technologies Ltd. is a data intelligence platform for private market research, tracking 3 million entities through 2600+ feeds categorized across industries, sub-sectors, geographies, and networks globally. It has become one of the leading providers of private company data and ranks among the top five players globally in terms of the number of companies and web domains profiled.

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  • VAP Group Set to Host Second Edition of Global AI Show in Dubai

    Dubai, October 10, 2024: Web3 and AI consulting giant VAP Group is pleased to announce the second edition of the Global AI Show, taking place on December 12 and 13, 2024 at the Grand Hyatt Exhibition Centre, Dubai. The event will be held under the official support of the United Arab Emirates Minister of State for Artificial Intelligence, Digital Economy and Remote Work Applications Office. With its theme of ‘AI 2057: Accelerating Intelligent Futures’, the Global AI Show is set to host C-suite executives, ministry officials and leaders from the world’s top companies who will explore the cutting edge technological developments across the UAE and the globe.

    The Cyber Security Council is the strategic partner of the two-day event organized by VAP Group and powered by a leading media network Times of AI. It will be led by a multidisciplinary advisory board – the Global AI Advisory Board – composed of industry experts such as Jamie Metzl, Healthcare Futurist, Geopolitical Expert and Author of Hacking Darwin; Alaa Moussawi, Chief Data Scientist at the New York City Council, among others, who will regularly meet to discuss key industry developments through the year as well as be the committee steering conversations that happen live on stage. 

    “The Global AI Show is more than just a one-time event. With over 100 C-suite speakers and a community of over 110,000 people, it will bring the whole AI ecosystem under one roof,” said Vishal Parmar, Founder and Chief Executive Officer of VAP Group.

    H.E. Dr. Mohammed Al Kuwaiti, Head of Cyber Security Council, UAE Government; Lt. Col. Dr. Essa Al Mutawa, Chief AI Officer, Dubai Civil Defence H.Q.; Dr. Marwan Alzarouni, CEO – AI, Dubai Economy and Tourism; Georges De Moura, Group CISO & Vice President, EDGE; Dr. Dirk Jungnickel, SVP Enterprise & Analytics & Intelligence, Emirates Group; Alexis Jean-Baptise, Chief Data & Analytics Officer, LÓreal, and many more will be present to lead discussions around the application and future of AI in various industries.

    While the world is gearing towards an AI-driven future, where technological evolution has unveiled a transformed tomorrow full of possibilities, significant risks, concerns and questions continue to persist. How effective are the emerging strategies for governing AI? How is AI already making groundbreaking progress that may alter the course of humanity? Where do the major opportunities lie between the potential benefits and fear surrounding these monumental changes?

    “The Global AI Show is committed to steer these crucial conversations, unravel answers, navigate groundbreaking developments and explore strategies that balance the transformative potential of AI in a multitude of sectors including healthcare, cybersecurity, governance, fintech, data and analytics,” said Vishal Parmar.

    Do not miss this opportunity to connect with visionaries in the AI industry.

    About VAP Group:
    VAP Group, established in 2013, is a leading force in Web3 and AI solutions, offering services in PR, advertising, recruitment, content development, and events and media management. Led by CEO Vishal Parmar, VAP Group continues to drive innovation through strategic PR and influencer marketing, bounty campaigns, and global conferences. Their flagship events, the Global Blockchain Show and Global AI Show, showcase the brightest minds in these transformative fields. Known for its creativity and forward-thinking approach, VAP Group remains at the forefront of blockchain and AI consultancy.

    For media inquiries, exclusive interviews, or press passes, please reach out to: media@globalaishow.com.

  • The “T30,” India’s First Car Charger-Compatible E-Bike, Launched by Raptee.HV

    The T30, India’s first high-voltage electric motorcycle, was introduced by Chennai-based electric vehicle company Raptee.HV for INR 2.39 lakh. The bike, according to the manufacturer, is reasonably priced when compared to motorbikes with 250–300cc internal combustion engines (ICEs) and uses technology similar to that of electric cars.

    The Raptee T30’s ability to work with universal charging standards is one of its primary features. The motorbike has an onboard charger, and it can be charged at any of the 13,500 CCS2 vehicle charging stations located all throughout the nation. It is anticipated that this network will grow much more in the upcoming year.

    The CEO and co-founder of Raptee.HV, Dinesh Arjun, stated that the company’s objective was to honour motorcycling with truly innovative technology rather than to build just an electric motorcycle. According to the brand, their HV technology is the final component needed to expedite the electrification of motorbikes and completely transform the way they are manufactured going forward.

    Deliveries Ftarting from January

    Beginning in January, Raptee T30 deliveries are scheduled to take place in Chennai and Bangalore. Depending on demand, additional cities may be included later. At its Chennai headquarters, Raptee.HV will also launch Tech Store.HV, its first experience centre.

    In order to reach a wider audience, Raptee.HV plans to provide both traditional dealership models and direct-to-consumer solutions. In order to provide customers with long-term certainty, the motorcycle also comes with an 8-year or 80,000-kilometre warranty.

    Specifics of T30

    The T30 has a real-world range of over 150 km per charge, and an Indian Driving Conditions (IDC)-estimated range of 200 km. It takes less than 3.5 seconds to accelerate from 0 to 60 kmph. According to legal requirements, the bike has a robust IP67-rated battery pack that is waterproof and dust-resistant.

    Regenerative braking and a dual-channel ABS braking system are included on the new Raptee T30. It has a CCS2 charging port and a 5.4 kWh Li-ion battery. The business claims that fast charging with a car charging station takes about 36 minutes, and charging from 20% to 80% at 3.3 kW takes about 60 minutes.

    To ensure a seamless and simple user experience, Raptee.HV has created all the electronics in-house, including a specially designed operating system based on automotive-grade Linux. Four colour options for the T30 are planned: Eclipse Black, Mercury Grey, Arctic White, and Horizon Red.

    Raptee.HV was established in 2019 and is based in Chennai’s Manapakkam. It employs about 120 people. In order to assist its innovation and scaling initiatives, the company has secured a grant of INR 3.27 crore from ARAI and has acquired 40 acres of property in Cheyyar for future expansion.

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  • By June 2025, BSNL will Transition to 5G: Scindia

    Union Telecom Minister Jyotiraditya Scindia stated on September 14, 2024, that state-run telecom company BSNL will finish rolling out locally built 4G technology through 1 lakh base stations by May of next year and then transition to a 5G network by June of 2025. Speaking at the US-India Strategic Partnership Forum, Scindia asserted that India will lead the world in 6G technology, having marched with it in 5G and 4G.

    According to the minister, Prime Minister Narendra Modi has made it quite clear that the government-owned business will not make use of other parties’ equipment.

    “We now have a fully operational radio access network and a core. One lakh locations are planned by April or May of the next year. As of right now, 38,300 locations have been deployed. Our own 4G network will be launched and will transition to 5G by June 2025,” he said. According to Scindia, India will be the sixth nation in the world to be able to accomplish it.

    India Among the Fastest Nations to Roll Out 5G Network

    According to Scindia, India has implemented 5G technology at the fastest rate globally, having installed 4.5 lakh towers in 22 months to reach 80% of the nation’s population.

    He said that the telecom industry in India has completely changed, with the number of broadband connections having increased to 940 million from about 60 million a decade ago.

    “Ten years ago, a voice call cost 50 paisa; today, it just costs three paisa. The price per voice call has decreased by 96%. Ten years ago, the cost of one gigabyte of data was INR 289, which is about equivalent to three and a half dollars now, or 12 cents. Consequently, exponential penetration and acceptance have been observed,” the minister stated.

    He claimed that the Prime Minister consistently advocates for the construction of quality service rather than merely building towers. India should establish itself as a product nation and reposition its telecommunications as a means to a service rather than an end product.

    India-US Strategic Ties

    Regarding strategic relations between the US and India, the minister stated that both nations are taking steps to ensure that their partnership transcends technological advancements.

    “This was a historic visit for the prime minister to the US. For the first time, we have reached a consensus to establish a fabrication unit (fab) in India to provide chips for US defence,” he commented. According to Scindia, it would have profound effects on both the US and India.

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  • As Competition in Quick Commerce Grows, Blinkit Removes its “Zero Notice Period” Policy

    Leading company in the quick commerce space, Blinkit, has extended notice periods for its staff, especially for senior management. A media source claims that this modification, which increases the notice period from zero to two months, is intended to help employers retain talent.

     The choice to change employment contracts was made because Blinkit is up against competition in an industry that is estimated to be worth $5.5 billion. Talent retention is a key priority for Blinkit, as rivals like Zepto and Swiggy compete for a piece of this lucrative industry. The pressure to hang on to qualified employees has increased with well-funded competitors like Zepto recently investing $340 million and bigger firms like Walmart launching Flipkart Minutes in several Indian cities.

    Initiative Provides Safeguarding Against Poaching

    Blinkit’s action is both proactive and reactive to the current situation. To prevent competitors from poaching, the notice time has been extended. Blinkit is aware that offers from competitors, especially those with substantial financial resources, may entice their best employees to leave.

    This policy was implemented in July 2024 by Zomato, the company that runs Blinkit, and it represents a move towards greater safeguards for its employees. The goal of the policy is to provide a safety net that enables the business to keep workers on for longer. Considering how quickly talent is moving in the quick commerce industry, this is not surprising. According to a media report, “A lot of companies are doing that, and Blinkit is taking measures to avoid losing talent.”

    Additionally, it has been stated that Blinkit has started putting staff members who want to join direct competitors on garden leave for a period of two months. This strategy aims to stop confidential information from being disclosed.

    Quick Commerce Companies Facing Severe Challenges

    Although Blinkit is making a lot of efforts to protect its talent, it is not the only company in the industry dealing with these difficulties. Because these businesses have similar skill sets, quick commerce companies like Swiggy have been actively hiring from giants of online shopping like Amazon and Flipkart. Quick commerce companies have established a “hunting ground” for talent in areas linked to product design, backend operations, and advertising campaigns, making poaching a regular occurrence.

    Companies such as Zepto, for example, have garnered media attention for their aggressive hiring practices, providing extremely competitive compensation and sizeable yearly raises to entice top performers. Employees may end up with yearly pay increases as a result of these tactics, which will increase the industry’s rivalry for talent.

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  • The Grand Pitch Season 3: SIBM Pune’s very own Shark Tank!

    In the ever-evolving landscape of entrepreneurship, one event stands tall as a beacon of light and opportunity for promising startups. The Grand Pitch, proudly recognized as SIBM Pune’s very own Shark Tank, is set to return for its highly anticipated Third Season. This flagship event, meticulously organized by the Innovation Council, the entrepreneurship cell of SIBM Pune, has rapidly become a benchmark in the startup ecosystem, offering a platform where innovation meets investment, and vision transforms into reality.

    The Grand Pitch was born out of a vision to bridge the gap between ground-breaking startups and the resources needed to bring them to life. Since its inception, it has stood as a reflection of the power of innovation and the spirit of entrepreneurship. The event’s structure provides a unique blend of high-stakes pitching, expert mentorship, and the potential for life-changing investments.

    The trajectory of The Grand Pitch has been nothing short of phenomenal! From its impressive debut in 2022 to the record-breaking second season, the event has consistently raised the bar for promising startups.

    The previous season was a reflection to the event’s growing impact, with startup founders achieving incredible milestones and attracting investments ranging from ₹30 lakhs to ₹3 crores, culminating in a staggering total of ₹5.7 crores. With the third season right around the corner, The Grand Pitch is set to surpass all past milestones.In a noteworthy advancement that highlights the event’s success and the organizers’ dedication to fostering innovation, the investment pool has been increased from ₹50 Crores to an impressive ₹75 Crores. This monumental leap provides participating startups with even greater opportunities to secure the funding necessary to elevate their businesses.

    This year, the event would be graced by a diverse panel of investors, showcasing a range of investment expertise and industry knowledge. Each of them brings unique insights and experience, making this event a prime opportunity for impactful investments and potential partnerships. Joining the event are Mr. Akash Mishra, Co-founder of Venture Vista; Mr. Anand Kataria, Private investor, AHICO; Mr. Chandrashekar Kupperi, Founder of ANOVA and General Partner at Peaceful Progress Fund; Mr. Devang Raja, Founder of Venture Wolf; Mr. Gaurav Verma, Venture investor, Stealth mode; Mr. Namay Kedia, Founder of Ballers and Indian Angel Investors Drinks; Mr. Nitesh Aggarwal, Chief Investment Officer at a leading Single Family Office; Mr. Rohan Bajaj, Senior SDET Manager at Jupiter, and Mr. Sayan Ghosh, Co-Founder of Stealth. This powerhouse lineup promises to create incredible opportunities and conversations for entrepreneurs and investors alike.

    Their diverse backgrounds in venture capital, fintech, consumer brands, and technology will facilitate vital funding and support for our participants, making this season an extraordinary opportunity for innovation and groundbreaking solutions.

    With over 25,000+ Unstop impressions and 150 registrations, this years’ participants range from early to growth stages, hailing from major cities including Ahmedabad, Bengaluru, Delhi, Mumbai, and Pune. Startups from prestigious institutes like SIT, SIBM Bengaluru, Delhi University, and VIT, as well as former Shark Tank India participants, representing sectors such as Agritech, Drone Manufacturing, Health Tech, and Fintech, will be on their path to growth during this spectacular event.

    As we countdown to the launch of Season 3, the excitement is palpable. The stage is set, the investors are ready, and the opportunities are boundless. Are you ready to immerse yourself in the innovation and creativity that will shape the future of entrepreneurship?

    The Grand Pitch is more than just a platform for pitches; it’s a celebration of entrepreneurship and a showcase of the future. Let us embrace the spirit of innovation and collaboration as we embark on this exciting journey. The future of entrepreneurship is bright, and it starts here at The Grand Pitch!

  • Hero Electric wants Subsidy Misappropriation Settlement with Centre

    The Ministry of Heavy Industries (MHI) has been approached by Hero Electric to resolve ongoing disputes and release pending electric vehicle (EV) subsidies, according to officials who briefed the media.

    The manufacturer of electric motorcycles has committed to paying fines for any infractions or noncompliance. Hero Electric has contacted the Central Government in an attempt to get their outstanding problems resolved. “We are reviewing their request,” a high-ranking government representative stated.

    MHI’s Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II) programme benefitted Hero Electric, under the leadership of Naveen Munjal. Subsequently, an investigation revealed that the company and five other entities had violated mandatory localisation standards, leading to a government crackdown.

    What Exactly the Conflict is?

    The Ministry of Heavy Industries received complaints in 2022 from original equipment manufacturers (OEMs) registered under the scheme, alleging that Hero Electric, Okinawa, and Benling India were selling electric vehicles in violation of local sourcing regulations and were involved in rampant vehicle part imports. These complaints concerned the OEMs’ disregard for the FAME-II guidelines.

    After the ministry looked into 13 businesses, it was discovered that six of them—Hero Electric, Okinawa Autotech, Benling India Energy and Technology, AMO Mobility, Greaves Electric Mobility, and Revolt Motors—had violated the Faster Adoption of Manufacturing of Electric Vehicles (FAME-II) standards.

    Among these businesses, AMO Mobility, Greaves Electric Mobility, and Revolt Motors obtained a clean sheet from the government after returning the subsidies plus interest amount in a matter of months. Nevertheless, Hero Electric, Okinawa Autotech, and Benling India were removed from the FAME-II programme as a result of their failure to refund the incentives.

    The authorities declared in an official statement that Benling India, Okinawa Autotech, and Hero Electric had been deregistered. The next step is to be barred from all Ministry initiatives; this has already been applied to Benling India and Hero Electric. Since Okinawa was in court at the time, they were not barred.

    Claims made by Centre and Hero Electric

    Subsequently, the government requested that these EV manufacturers return the subsidies, arguing that they had been improperly used. Hero Electric refuted the charges of the government, while three companies returned the money. It also filed a lawsuit and demanded the release of INR 556 crore in unpaid subsidies for completed transactions.

    On the other hand, the Centre claimed that Hero Electric had violated FAME II standards and attempted to recoup INR 133 crore along with penal interest. Hero has since sent the Centre a new message in an attempt to resolve the conflict.

    The government representative stated that Hero has put out six proposals to resolve the conflict: a fine, a modification of the subsidy amounts, mediation, car and plant retesting, and third-party reinvetigation. According to the official, it also expressed its openness to ‘any alternative corrective measure as may be offered by the ministry’.

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