WazirX’s legal troubles mount; NPCI’s revenues rise

Two big WazirX users have raised questions about the legal proceedings over the $230 million cyberattack. This and more in today’s ETtech Top 5.

Also in this letter:
■ Paytm aims for profitability
■ NCLAT postpones Byju’s hearing
■ Mamaearth shares fall

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High rollers throw tough questions at WazirX amid legal tangles

Two of the largest corporate users of the WazirX platform are launching Tough questions on the cryptocurrency platform, which has knocked on the doors of the Singapore insolvency court after a devastating cryptocurrency theft.

Tell me more: In a letter to the Singapore court, the duo questioned why they are described as contingent creditors of a Singapore company (called Zettai) in court documents when their dealings have been with WazirX, which is owned by an Indian entity, Zanmai.

Most investors in India were unaware that Zettai is the parent company of Zanmai, which launched the WazirX platform.

Read also | The legal entanglements of cryptocurrencies seem as baffling as the digital asset itself

The two investors, Bitcipher Labs (owner of CoinSwitch, another cryptocurrency platform) and NextGenDev, have stated that their “legal relationships are with Zanmai and not Zettai.”

Cyber ​​theft: A cyber attack in July 2024 saw one of the platforms Portfolios emptied of $234 million in fundsBut it is unclear which specific wallet was emptied and what WazirX users’ funds were held in that wallet, the two platform users said.

Read also | Hacker who stole $234 million in cryptocurrency in India begins laundering funds

Context: According to the affidavit filed by WazirX founder Nischal Shetty, Zettai took control, “under protest,” of the cryptocurrency tokens of its partner Binance (the world’s largest cryptocurrency exchange) following a rift between the two. The dispute is currently in the midst of an arbitration process, the deliberations of which are confidential, in Singapore.

FIU Hearing: On the other hand, the Financial Intelligence Unit (UIF), an agency against money laundering, will report this week Respond to requests from seven offshore virtual digital asset service providers – Bitfinex, MEXC Global, Kraken, Huobi, Gate.io, Bittrex and Bitstamp – will restart their operations in the country.

These exchanges were banned for non-compliance with India’s Prevention of Money Laundering Act (PMLA).

Read also | WazirX’s parent company is looking for “white knights” to rescue the cryptocurrency exchange

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NPCI posts 37% rise in FY24 net profit at Rs 1,134 crore, revenue up 42%

The National Payments Corporation of India (NPCI), which operates the Indian-origin Unified Payments Interface (UPI), It has reported a 37% rise in net profit at Rs 1,134 crore. for fiscal year 2024.

Revenue Generation: The Mumbai-based retail payments network generates revenue primarily through the operation of services such as UPI, IMPS (Immediate Payment Service), AePS (Aadhaar-enabled Payment System), BBPS (Bharat Bill Payment System) and NCMC (National Common Mobility Card). It receives a percentage of the value of transactions processed by its partner banks.

Financial data for fiscal year 24:

• Payment services revenues rose 37% to Rs 2,693 crore
• Other operating income more than doubled to Rs 118 crore
• Total revenue increased 42% to Rs 3,278 crore on a consolidated basis.
• Marketing expenses rose over 75% year-on-year to Rs 781 crore

Summary: Last month, NPCI has spun off its UPI-based payment appBharat Interface for Money (BHIM), as a standalone subsidiary. It also plans to spin off its RuPay card network and Credit on UPI lending feature to better focus on its product portfolio.

Read also | ETtech In-Depth | Bhim promised the moon but failed to deliver. Can NPCI turn things around?

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Paytm aims for profitability with a ‘compliance-first’ approach: Vijay Shekhar Sharma

Vijay Shekhar Sharma, founder of Paytm

Paytm will try Founder Vijay Shekhar Sharma said it will turn profitable soon. At the company’s 24th annual general meeting, however, it did not commit to setting a deadline.

Compliance in focus: Sharma said the digital payments company will strictly adhere to regulatory guidelines and adopt a “compliance-first approach.”

Paytm Payments Bank lost its ability to offer basic banking services to its customers on March 15, after the Reserve Bank of India highlighted major regulatory failures in its compliance process earlier this year.

PA License: Sharma also said that the company would like to apply for the payment aggregator license, now that it has received the necessary approvals from the Union government. The Centre authorized foreign direct investment (FDI) in your commercial payments business in July, making you eligible to apply for a PA license.

In quotation marks: Paytm CFO Madhur Deora said the company has cash reserves of Rs 8,500 crore and will focus on developing products and services for 500 million Indians, bringing them closer to mainstream financial services.

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NCLAT adjourns hearing of Byju’s case till October 1

Byju Raveendran, founder of Byju’s

The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) It has postponed the case involving Glas Trust Co.representing a group of US lenders to troubled education technology company Byju’s and its parent company, Think & Learn, until October 1.

Background: The Supreme Court is also hearing an appeal from Glas Trust, opposing a Rs 158 crore deal struck between the edtech firm and the BCCIalleging that the money paid by Byju Raveendran’s brother, Riju Ravindran, was tainted.

Summary: On August 14th, Supreme Court revived Byju’s bankruptcy casereversing a decision of the NCLAT that had quashed the bankruptcy proceedings and approved the settlement agreement with the BCCI.

On September 4th, The Bengaluru bench of NCLAT adjourned the matter. between Glas Trust Co and the parent company’s insolvency resolution professional (IRP), Think & Learn Pvt Ltd.

The auditor resigns: We reported on September 7th that Byju’s said its audit firm MSKA Associates, a subsidiary of BDO Internationalhas resigned. He is the second auditor to leave the troubled firm since June 2023, when Deloitte left citing governance issues.

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Mamaearth shares fall 5% after Rs 1,763 crore stake sale through block deal

Varun Alagh and Ghazal Alagh, co-founders of Mamaearth

Shares of Honasa Consumer, the parent company of Mamaearth, It fell 5% to the day’s low of Rs 495. on the NSE following the sale of a 10.9% equity stake worth Rs 1,763 crore through a block deal on Thursday.

Listed Sellers: The transaction reportedly involved sellers including Peak XV Partners, Redwood Trust, Sequoia Capital, Fireside Ventures, Stellaris Venture Partners India and Sofina Ventures SA.

Initially, it was reported that the sellers would sell an 8% stake in the company, equivalent to 263 million shares valued at Rs 1,261 crore. However, the size of the deal was later increased to a 10.8% sale.

Finance:

• Consolidated net profit rose 63% year-on-year to Rs 40 crore in the April-June quarter of FY25
• Revenue for the quarter was Rs 554 crore, up 19% from the previous year.

Zomato shares surge 4% to hit new all-time high as UBS reaffirms ‘buy’ rating

Deepinder Goyal, founder of Zomato

Zomato shares rose 4% on Thursday, hitting a new all-time high of Rs 283.60, after global brokerage UBS maintained a ‘buy’ rating with a target price of Rs 320, driven by a positive growth outlook.

Growth: UBS noted that industry volumes are growing by about 2.5% MoM in August this year, which has been adjusted for the number of days. The global brokerage firm estimates Zomato’s GMV for Q2FY25 to grow by 7% MoM.

Acquisitions: The largest food delivery man entered a Paytm agrees to acquire its event and movie ticketing business which was recently completed. Following this, global brokerage firms like Jefferies and JP Morgan also turned positive on the stock.

Today’s ETtech Top 5 newsletter was prepared by Riya Roy Chowdhury in Bengaluru and Megha Mishra in Mumbai.