BACK PAGE | PAGE 24 COMPANIES | PAGE 4 Ex-ChiefJustice Sushila Karki takes oath as PM ofNepal INTERNATIONAL | PAGE 7 Trenteyesnewretailbrand every5yearsingrowthpush AHMEDABAD, SATURDAY, SEPTEMBER 13, 2025 Microsoft, OpenAI reach deal to revise partnership FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XX 89, 24 PAGES, `12 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E CBC 15502/13/0012/2526 SENSEX: 81,904.70 ▲ 355.97 NIFTY: 25,114.00 ▲ 108.50 NIKKEI 225: 44,768.12 ▲ 395.62 HANG SENG: 26,388.16 ▲ 301.84 `/$: 88.28 ▲ 0.16 `/€: 103.48 ▼ 0.14 BRENT: $67.37 ▲ $1.00 GOLD: `1,09,390 ▲ `700 CONFLICTOFINTERESTREPORTLIKELYTHIS MONTH Sebi’s IPO push: Big firms can float smaller issues ● REITs get equity IN THE NEWS CP Radhakrishnan sworn in as 15th Vice President CP RADHAKRISHNAN WAS sworn in as the 15th Vice President of India on Friday. He later assumed charge as the chairman of the Rajya Sabha. ■ PAGE 10 Urban Company IPO subscribed 103x, max in 2025 THE `1,900CRORE IPO of Urban Company was subscribed 103.63 times the shares offered on the last day of bidding on Friday, making it the most subscribed issue in the country this year among large listings, report fe Bureau & agencies. ■ PAGE 6 PM to visit Manipur today, his first since 2023 ethnic strife PRIME MINISTER NARENDRA Modi will lay the foundation or inaugurate projects worth `8,500 crore in Manipur on Saturday, in his first visit to the state since the start of ethnic violence in May 2023. ■ PAGE 10 classification; NSE IPO post settlement ANANYA GROVER Mumbai, September 12 THE SECURITIES AND Exchange Board of India (Sebi) board on Friday gave a significant push to the initial public offering (IPO) market — the second biggest in the world after the US — by providing more institutional heft with increase in the investment limit of anchor investors,lowering the minimum public offer size for issues with post listing market capitalisation of `50,000 crore and above, and retaining the retail PROPPING UP THE MARKET Firms with post-issue m-cap of `50,000 cr – over `5 lakh cr: ■ Given time up to 10 years (with conditions) to achieve 25% minimum public shareholding MUTUAL FUNDS ■ Minimum public offer size reduced to 2.5%-2.75% (from 5%) investor’s portion at 35%. The decisions will help the strong IPO pipeline of `1.8 lakh crore expected to hit the market this financial year. In addition, NSE and Reliance Jio are also set to bring their mega issues. Continued on Page 10 ANCHOR ■ Book size increased INVESTORS to 40% (from 33%) ■ Insurers and pension funds included Maximum exit load brought down to 3% from 5% ■ Additional commission to distributors for investments from women investors ■ Easeofdoingbusinessmeasures THE SEBI BOARD on Friday approved a slew of ease of doing business measures, reports fe Bureau. It allowed listed debt issuers (non-convertible securities) to send annual reportsviaweb links or QR codes, reducing costs and aligning disclosure norms with equity issuers.The board also approved the phased establishment of offices in key state capitals and tier-1 cities to bolster investor protection, and facilitate SME and startup participation. ■ PAGE 6 Retailinflationrisesafter9months ● August print at 2.07%; rate cut hopes still alive MUKESH JAGOTA New Delhi, September 12 INDIA'S RETAIL INFLATION,as measured by the consumer price index (CPI), inched up to 2.07%inAugustfromarevised 1.61% in July as some food itemsturnedcostlierandmade the deflation in the segment less deep. July was the ninth »INSIDE« ON EXPECTED LINES CPI Core CPI Consumer Food Price index 12 8 ure, and was well within the Reserve Bank of India’s tolerance band. Retail inflation had stoodat3.65%inAugust2024. With this, and the expected deflationary impact of the GST cuts, many analysts feel that there is room for further rate cuts this financial year — by 25 oreven 50 basis points. 4. 4.13 2.07 2. -0.69 -0 4 0 -4 FOOD INFLATION IN NEGATIVE ZONE FOR 3 MONTHS IN ROW PAGE 2 Aug 2024 Aug 2025 straight month when both the overall CPI and the consumer foodpriceindex(CFPI)declined. The August print was still the lowest since January 2019 (1.97%),except forthe Julyfig- Continued on Page 7 ● AFTER DISHING OUTTAX RELIEF, IT’STIMETO FEED Finance minister Nirmala Sitharaman serves prasadam to devotees of Lord Venkateswara in Tirumala, Andhra Pradesh, on Friday. Sitharaman also offered prayers at the famed Tirumala temple Gold loan NBFCs shine amid tight unsecured credit GOLD LOAN FINANCIERS are likely to raise their disbursement and AUM growth targets as rising gold prices & tighter credit in unsecured and microfinance segments continue to boost demand, reports Narayanan V. ■ PAGE 6 Half of IPO-bound startups in the red AYANTI BERA Bengaluru, September 12 IN A YEAR that has been witnessing significant public marketactivityamongstartups,half of the new-age tech companies that are gearing up for market debut remain entrenched in losses. Of 42 companies FE tracked which have either filed their draft red herring prospectuseswith Sebi orare preparing to do so, 21 reported net losses intheirlast-availablefinancials. Among the loss-making startups are edtech unicorn PhysicsWallah, e-commerce platforms Meesho and Flipkart,logistics firms Shiprocket and Shadowfax,fintechs PayU, PhonePe, and Innoviti, quick commerce unicorn Zepto, meat-delivery startup Licious, mattress maker Wakefit, and F&B house of brands Curefoods and Rebel Foods. Aback-of-the-envelopecalculation shows that the combined loss of these 21 startups stood at over `12,000 crore, largely led by Flipkart, PhonePe,Zepto and Zetwerk. Whileitisn’tmandatoryfor companies to report a net profit for listing, National Stock Exchange (NSE) norms GROWTH POTENTIAL STILL A DRAW Profitable startups (` cr) OfBusiness (FY24) THE IT AND IT-enabled services (ITeS) sector is facing a sharpslowdowninhiring,with placements down 10-15% in the first half of the current calendar year, Sunil Chemmankotil, country manager of staffing majorAdecco,told FE. The pressure is expected to continue into the second half as tariffs, global macroeconomic headwinds, tighter client spends,and the growing impactofartificialintelligence weigh on the industry. The contraction comes despite the broaderjob market remaining resilient,with gains in e-commerce, logistics, and manufacturing helping offset weakness in IT,he said. External shocks are compounding the situation. The proposed HIRE Bill in the US, which seeks to impose a 25% tax on payments made for outsourced services, threatens to erode the competitiveness of WHEN PHYSICSWALLAH STARTED in 2016 with Alakh Pandey’s whiteboard lessons on YouTube, the promise of edtech was scale without infrastructure.Asmartphone, an Internet connection,and a good teacher — that was the pitch. Fast forward to 2025, the same company is raising money to build classrooms, hire landlords, and compete with traditional coaching centres.Somewhere along the way, the logic flipped: offline 1 OFFLINE STUDENT IS WORTH 10 ONLINE ■ Firm’s offline average Only 7% of revenue per user stood at `40,404 in FY25, over 10 times the online Arpu PhysicsWallah’s ■ Its revenue jumped students attend its offline classes ■ Its losses narrowed sharply, 49% year-on-year to `2,886.6 cr in FY25 classrooms but also from a spree of acquisitions like Utkarsh Classes, iNeuron, Knowledge Planet, Xylem, and more, bringing local test 4.46 mn from over `1,131 cr in FY24 to `243.3 cr in FY25 prep brands under its umbrella. All of this has meant steep upfront costs.Centres require marketing before the first student walks in, leases must be signed even if enrolments fall short,and regulatory hurdles vary from city to city. It’s an expensive gamble com- pared to the low-cost online origins of the business. Yet, the numbers explain why PhysicsWallah is making this bet. In FY25, its offline business brought in `1,351.9 crore, nearly as much as the `1,404 crore earned from online courses. That parity is striking when you consider only 7% of PhysicsWallah’s 4.46 million students attend its offline classes. The math tells the story. Offline average revenue per user(Arpu)stoodat`40,404in FY25,more than ten times the `3,682 Arpu online. Every 297 240 Urban Company (FY25) Loss-making startups (FY24, ` cr) 4,248 Flipkart 1,996 PhonePe 1,249 Zepto 919 595 stipulatethattheyshouldhave operating profit or earnings before interest, depreciation and tax for at least any two of the three financial years preceding the application. However, many investors look beyond the bottom line to evaluate the IPO readiness of a startup. “Unlike traditional manufacturing firms that capitalise large costs like land and machinery on their balance sheets, startups channel most SUNIL CHEMMANKOTIL, COUNTRY MANAGER, ADECCO Tariffs, global macroeconomic headwinds, tighter client spends, and the growing impact of AI weigh on the IT industry Zetwerk Shiprocket of their spending into growth and customer acquisition, which directly hits the P&L (profitandloss),”explainsPunit Shah,managingpartneratAlteriaCapital,aventuredebtfund. “Thisoftenmakesthemappear loss-makingdespitebeingprofitable at a unit economics level. Hence, operating metrics are more meaningful to look at than net profit,”he added. Continued on Page 7 EU trade commissioner Maros Sefcovic and commerce & industry minister Piyush Goyal India and EU vow to meet year-end deadline for trade pact MUKESH JAGOTA New Delhi, September 12 offline student is, in effect, worth an entire cohort of onlinelearners.Thatmultiplier effect has allowed the offline segment to contribute nearly half the company’s revenues despite its smaller footprint. This shift is not just about revenuebutalsoaboutgeography. The company’s DRHP highlights how offline centres help hedge against overdependence on traditional hubs like Kota, where enrolments fell from 27,158 in FY23 to just 11,540 in FY25. INDIA AND THE European Union (EU) are maximising efforts to finalise the negotiationsontheirFreeTradeAgreement (FTA) by the end of this year, the EU trade commissionerMaros Sefcovic said Friday as both sides wrapped up 13th round of negotiations. “Wewillnotagreeoneverythingbutasmajordemocracies in an increasingly uncertain world there are a lot of areas where we can work together. I am sure we will achieve a very goodagreement,”hesaidatthe annual session of Automotive Component Manufacturers’ Association.“Seeing the goodwill,political courage and constructive attitudes fornegotiations we will meet our deadline,”he added. ThedeadlinewassetinFebruary by European Commission President Ursula von der Leyen and Prime Minister Narendra Modi when the entire college of commissioners of the EU had visited India. The 13th round of talks forthe agreement started on Monday and ended on Friday. “Wearelookingforwardtoa very robust,fair,equitable,balanced,win-win partnership in termsofanenduringFTA,”commerce and industry minister Piyush Goyal said at the same event afterSefcovic spoke. Continued on Page 7 Continued on Page 10 Indian IT companies.The slowdown in hiring is not totally unexpected as leading IT firms are rethinking their traditional manpower-heavy model. Tata ConsultancyServices (TCS) said earlier this year that it would shed2%ofitsglobalworkforce, which is roughly12,000 jobs. Continued on Page 10 The physics of business: Online betting on offline future is now the big growth driver. The company’s draft red herring prospectus (DRHP) shows how this transition is reshaping its economics. Lease rentals for its physical centres shot up 47% in FY25 to `141 crore,while depreciation and amortisation expenses linked to these classrooms grew 22% to `366.4 crore.From a handful of outlets a few years ago, PhysicsWallah today runs nearly 200 centres across 109 cities. Expansion has come not just from opening “Vidyapeeth”and“Pathshala” 492 Lenskart (FY25) Shift to physical classrooms is helping PhysicsWallah grow, even as expenses climb AYANTI BERA Bengaluru, September 12 602 Infra.Market (FY25) IThiringcontracts 10-15%inJan-Jun, pressuretopersist GEETA NAIR Pune, September 12 1,819 Groww (FY25) Ahmedabad