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<ul><li>Unlisted shares are bought from existing employees of the specific company who can offer shares to new investors who are keen to invest.</li><li>Some investment firms like Analah Capital, TradeUnlisted and Unlistedkart are providing their portals to help investors buy unlisted shares.</li><li>A retail investor should invest only the surplus money in unlisted companies as these are volatile and illiquid investments.</li></ul>Investment in publicly listed companies like Reliance Industries, State Bank of India is very well known. But there are also ways to invest in unlisted companies, which are growing at a pace and could give attractive returns. Unlike the listed ones, shares of unlisted companies are not available for trading on any stock exchanges. So those who want to invest in those companies can do so through other platforms. Here are some ways for retail investors to invest in unlisted space: Pre-IPO investment Pre-IPO (initial public offering) trading means buying/selling the shares of a company before it gets listed on the stock exchanges. Since these shares are not traded in the public market, you do not have a marketplace like stock exchange to buy it. Unlisted shares can be bought through intermediaries and platforms who specialise in sourcing and placement of unlisted shares and can facilitate the trade. Intermediaries and platforms buy shares from employees i.e., employee stock options (ESOP), existing investors and offers new investors who are keen to invest. In the last few years, the pre-IPO market has opened up and is now available to the masses. Some investment firms like Analah Capital, TradeUnlisted and Unlistedkart have portals to help investors buy unlisted shares. Shares of these unlisted companies will be held in a demat account. According to Unlistedkart, depending on the unlisted share, the minimum amount can be between ₹ 25,000–₹ 50,000. Other investment platforms have not mentioned a threshold of minimum investment. As per India’s market regulator’s rules, all pre-IPO shares are locked in for six months from the date of listing. It means you cannot sell stocks before six months from the date of listing. In case of unlisted securities, if the stock is sold within 24 months, it’s considered short term. The gains are added to the income of the person and taxed at a tax slab rate applicable to you. And if sold after 24 months, it is taxed as long term capital gains at 20% after indexation. However, remember unlisted shares are illiquid and volatile, so you may not be able to sell your shares in a hurry. Since the pre-IPO market is mostly dominated by institutional players and the transaction among them is generally slower which makes it difficult to sell shares and get money any time of the day. Here is the data on some of the past IPOs: <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Companies </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Pre-IPO selling </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">IPO price band </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Listing price </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Current price </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Bombay Stock Exchange </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹200 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹806 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹1069 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹1179 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Ratnakar Bank (RBL) </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹60 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹225 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹301 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹179 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">ICICI Lombard </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹400 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹661 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹680 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹1600 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">HDFC Standard Life </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹210 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹290 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹344 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹742 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Avenue Supermarts (DMart) </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹280 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹300 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹616 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹4209 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">ICICI Prudential Life Insurance </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹130 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹334 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹310 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹696 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Central Depository Services (CDSL) </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹60 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹149 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹261 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹1335 </td></tr><tr><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">AU Small Finance Bank </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹175 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹358 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹597 </td><td style="border-left:solid #000000 0.8333325pt;border-right:solid #000000 0.8333325pt;border-bottom:solid #000000 0.8333325pt;border-top:solid #000000 0.8333325pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">₹1115 </td></tr></tbody></table>Source: Planify Pre-IPO funds Investors get into the pre-IPO funds to get easy and early access to some of the good companies. Edelweiss Wealth Management, Kotak Investment Advisors, Trifecta Capital and IIFL Wealth are some of the wealth management firms that offer funds that invest in pre-IPO companies. Edelweiss Recently Listed IPO Fund, which invests in up to 100 recently listed companies and upcoming IPOs, has reportedly delivered a compound annual growth rate (CAGR) of 21.7% since inception. A retail investor should invest only the surplus money in unlisted companies as these are volatile and illiquid investments. This way, even if you lose this money it should not matter to you. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/ecommerce/news/amazon-lawyers-allegedly-paid-bribes-to-indian-government-officials/articleshow/86360262.cms">Amazon is investigating its lawyers for allegedly bribing Indian government officials</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/cars24-raises-450-billion-doubles-it-valuation-to-1-84-billion/articleshow/86361516.cms">Cars24 raises nearly half a billion dollars, doubles it valuation to $1.84 billion</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/kotak-mahindra-bank-to-buy-about-10-in-kfin-technologies-for-310-crore/articleshow/86360811.cms">Kotak Mahindra Bank to buy about 10% in KFin Technologies for ₹310 crore</a>

Want to invest in unlisted companies like Ola, Paytm or Byju’s? Here is how you can do it

Billionaire Mukesh Ambanis <keyword id="10926" type="CITY" weightage="20" keywordseo="Reliance">Reliance</keyword> Industries is weighing a bid for Deutsche Telekom AG's Netherlands subsidiary, according to people familiar with the matter, Bloomberg reported. The Indian conglomerate is working with an adviser to evaluate an offer for <keyword id="4780953" type="PERSON" weightage="20" keywordseo="t-mobile-netherlands">T-Mobile Netherlands</keyword>, the sources said, asking not to be identified as the information is confidential. Deutsche Telekom is seeking about 5 billion euros ($5.9 billion) in any sale, the people said. The report said that deliberations are ongoing, no final decision has been made and there's no certainty that Reliance will decide to proceed with a formal offer, according to the people. Deutsche Telekom declined to comment. A representative for Reliance also could not comment immediately. Deutsche Telekom is working with Morgan Stanley on the sale of the business, which has attracted interest from private equity firms including Apax Partners, Apollo Global, Providence Equity and <keyword id="6402698" type="UNKNOWN" weightage="20" keywordseo="warburg-pincus">Warburg Pincus</keyword>, Bloomberg had reported last month. Buyout firms are drawn to such assets as they can gain control of underlying infrastructure, which offers steady long-term returns. In May, Dutch telecom group <keyword id="1126847" type="ORGANIZATION" weightage="20" keywordseo="Royal-KPN-NV">Royal KPN NV</keyword> had said that it had rejected an "unsolicited high-level approach" from investment firms EQT AB and <keyword id="9837243" type="COMPANY" weightage="20" keywordseo="stonepeak-infrastructure-partners">Stonepeak Infrastructure Partners</keyword>. Reliance is India's largest company by market value, with a business that spans oil refining, petrochemicals, retail and telecommunication sectors. A deal for T-Mobile Netherlands would represent a rare purchase in Europe and come as Mukesh Ambani tries to transform Reliance from an old-economy conglomerate into a technology and e-commerce titan, the report said. Ambani had said previously that he eventually wants to expand Reliance's digital unit -- Jio Platforms -- overseas and last year it secured more than $20 billion of backing from the investors, including Facebook. "This could be one step forward in that direction, in addition to leveraging natural synergies to Jio," said Kranthi Bathini, a strategist at Mumbai-based consultancy <keyword id="11832496" type="UNKNOWN" weightage="20" keywordseo="wealthmills-securities">WealthMills Securities</keyword>. "This could also serve as the beginning of aggressive acquisitions in this space and deploying funds in different geographies after Jio Platforms raised record money last year," Bathini said. Shares in Reliance have risen 5.2 per cent this year, giving it a market value of 13.7 trillion rupees ($184 billion). The stock rose as much as 1.7 per cent on Tuesday, before giving up some of these gains. Deutsche Telekom entered the Dutch mobile-phone market in 2000, acquiring a stake in a venture with Belgacom SA and Tele Danmark. The business was renamed T-Mobile Netherlands in 2003 after the German carrier bought the remainder. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/google-has-rolled-out-a-new-feature-to-skip-chapters-in-youtube-videos/articleshow/85210299.cms">You can now skip chapters in YouTube videos with two-finger double tap</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/apps/news/battlegrounds-mobile-india-ios-version-expected-to-launch-on-august-20/articleshow/85208861.cms">Battlegrounds Mobile India iOS version expected to launch on August 20</a>

Mukesh Ambani's Reliance Industries may bid for Deutsche Telekom AG's Netherlands subsidiary, reports Bloomberg

<ul><li><keyword id="6354720" type="UNKNOWN" weightage="20" keywordseo="ola">Ola</keyword> believes this allocation will reward Ola’s ‘high impact’ employees. </li><li>The company claims to have seen a strong recovery in its ride hailing business. </li><li>Earlier this month, Ola raised $500 million in a pre-IPO round.</li></ul>Ride hailing giant Ola has expanded its employee stock option plan (<keyword id="120103" type="PERSON" weightage="20" keywordseo="Esop">ESOP</keyword>) pool to ₹3,000 crore. It has also allotted an additional ₹400 crore worth stock to employees ahead of its initial public offering (IPO), the company said in a press statement on Wednesday. ESOPs are employee benefit plans to offer employees a limited number of shares in the company. The company believes that this allocation will reward Ola’s high impact employees and lead to a long-term wealth creation for them. “Our expanded ESOP programme, along with the fresh stock allocation of ₹400 crore, enables our key talent to participate in the long term wealth creation opportunities generated by their innovations and the impact they create. It will also reinforce their sense of ownership and align their growth with that of the company as we continue to accelerate the world’s transition to sustainable mobility” said Bhavish Aggarwal, Ola’s cofounder and chief executive. Ola, in its press note, also highlighted that the company has seen strong recovery in its ride hailing business over the last several months. The company was severely hit by the first wave of COVID-19, as its revenue declined by 95% in April-May 2020. This led to layoffs in the company, impacting over<a href="https://www.businessinsider.in/business/startups/news/ola-fired-1400-employees-as-revenue-is-hit-by-95-in-the-last-two-months/articleshow/75843656.cms"> 1,400</a> employees in May 2020. The Bengaluru-based startup got the wheels for its IPO rolling earlier this month, when it raised <a href="https://www.businessinsider.in/business/startups/news/ola-app-raises-500-million-from-temasek-and-warburg-ahead-of-ipo/articleshow/84261607.cms">$500 million from investment titans</a> Temasek and Warburg Pincus in a pre-IPO round. The company’s chief executive Aggarwal also infused an undisclosed amount in the startup in his personal capacity. The company was founded in 2010 by Aggarwal and Ankit Bhati. It has marked its presence across three continents. It has raised $4 billion to date from marquee investors like SoftBank, Tencent, Steadview Capital, Eternal, Sailing Capital, China Eurasian Economic Cooperation Fund and others. SEE ALSO <a href="https://www.businessinsider.in/business/startups/news/droom-automobile-marketplace-raises-200-million-in-a-pre-ipo-round-at-unicorn-valuation/articleshow/84818567.cms" data-type="tilCustomLink" style="">Automobile marketplace Droom is raising $200 million in a pre-IPO round at unicorn valuation</a> <a href="https://www.businessinsider.in/business/startups/news/the-whole-truth-a-healthy-packaged-food-brand-raises-6-million-from-sequoia-capital/articleshow/84815594.cms" style="">The Whole Truth, a ‘healthy’ packaged food brand, raises $6 million to enter new categories</a> <a href="https://www.businessinsider.in/stock-market/news/rolex-rings-ipo-opens-on-july-28-and-closes-on-july-30-with-a-price-band-of-880-900/articleshow/84813639.cms" style="">Rolex Rings IPO opens today with a price band of ₹880-900</a>

Ola expands ESOP pool to ₹3,000 crore, issues stock worth ₹400 crore to employees

<ul><li>Section 80JJAA of the Income Tax Act gives deduction for three years to employers for hiring new people.</li><li>The current limit of this provision is ₹300,000 a year that effectively means that the compensation of these people should be less than ₹25,000.</li><li>If the limit is increased, it could help in boosting the salaries of and the number of jobs for gig workers.</li></ul>One of the major concerns raised by the gig workers — such as <keyword id="4235145" type="General" weightage="20" keywordseo="delivery-partners" source="Orion">delivery partners</keyword>, drivers and more — who work for companies like Zomato, Swiggy, BigBasket and Blinkit (Grofers), is <a href="https://www.businessinsider.in/business/startups/news/bigbasket-flipkart-and-urban-company-may-have-paid-fair-wages-but-it-wasnt-enough-to-earn-a-living/articleshow/88946309.cms">the lack of decent compensation</a>. But what if we were to tell you that if an existing provision of the Income Tax Act is clarified and amended, it could raise salaries for the gig workers. Under Section 80JJAA provision of the Indian Income Tax Act, companies can get a tax deduction for hiring new people. If a company’s workforce increased by 50, the salary paid to these employees would make the company eligible for an additional deduction of 30% for the next three financial years, Hemal Zobalia, Partner at Deloitte Haskins &amp; Sells LLP explains. For example, if the company is paying ₹1000 annually to each of these 50 employees, it will get ₹300 as tax deduction for each of them for each of the next three years. Essentially, 90% of the first year’s salary, for each of the new employees, will be deducted from the company’s taxable profit. The goal of this provision is to create more permanent employment for those who are “low-skilled”, according to Jimit Devani, a partner at Deloitte Haskins &amp; Sells. The provision is applicable for employees whose salaries are ₹25,000 per month or less.Increasing the salary limit to ₹35,000-₹40,000 may push more companies to hire permanent employees instead of contractual ones. Meanwhile, Zobalia is of the belief that this would also help in further increasing their payout and salaries. But there is a bigger challenge here. This is not a widely availed incentive by the companies for several reasons. First, companies prefer to hire people on contract and keep them on a third party’s payroll. Such companies cannot avail tax benefit under the 88JJAA provision. Bringing people on to the payroll makes them eligible for other benefits like pension, insurance, and severance to name a few, Devani said. The third parties, however, do avail these tax benefits for employees that have been on their payroll for at least eight months, Devani added. The second issue with this provision is that the benefit is available only on the net addition of employees. Say, a company has a total of 10 employees. Five of them quit the company in a year, and six more are hired in the same year. While the company has six new employees, the net addition to the workforce is only one. And, so, the tax rebate is available only for one additional employee, and not all six. Improving this provision under the income tax law may go a long way in creating sustainable employment for people with less-valued skills, across a range of industries including the gig economy of which the likes of Zomato, Swiggy, Amazon and Flipkart are part of. The current state of salaries in the gig economy As per <a href="https://www.businessinsider.in/business/startups/news/urban-company-ola-uber-are-not-the-best-places-for-gig-workers/articleshow/88561764.cms">Fairwork India report of 2021</a>, most newage digital platforms — including Zomato, Swiggy, Uber, Dunzo, PharmEasy and Ola — do not offer fair wages to the contractual workers associated with them. Even though companies like Flipkart, Urban Company and BigBasket pay higher and better, it still may not be enough to make local living wage after costs, the report adds. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Avg income range, including cost </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Flipkart </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹14,500-₹25,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Urban Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹30,000* </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BigBasket </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹18,000-₹24,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Zomato </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹20,000-₹30,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Swiggy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10,000-₹15,000 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Note: Urban Company’s average salary excludes cost Source: Urban Company’s latest report, Apna.co It is important to note that there has been a further reduction in the payout for delivery executives due to decrease in rate cards and incentives, along with increased input costs of petrol and platform commissions. This has made matters worse for the Indian gig workers like delivery partners and drivers, the Fairwork report adds. Fairwork rates digital platforms on their treatment of gig workers who work for them. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/budget/news/budget-2022-why-income-tax-slabs-may-not-change-this-year/articleshow/89179572.cms">Budget expectations 2022: Here’s why income tax slabs may not change this year</a> <a href="https://www.businessinsider.in/budget/news/the-indian-government-has-spent-less-than-half-the-money-it-had-budgeted-for-capital-investments-so-far/articleshow/88852518.cms">The Indian government has spent less than half the money it had budgeted for capital investments, so far</a> <a href="https://www.businessinsider.in/budget/news/budget-2022-expectation-in-higher-standard-deduction-tax-slabs-and-covid-insurance/slidelist/88891751.cms">From higher standard deduction and change in tax slabs to clarity on Covid insurance, here’s what tax experts want from Budget 2022</a>

There’s a way government can prod Zomato, Swiggy, Uber and Ola to increase salaries of delivery partners and drivers

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Aaron P. Bernstein/ReutersJelena McWilliams, FDIC chairperson</div></div></div><ul class="summary-list"><li>Varo, a digital-only bank, is coming closer to gaining a national bank charter from the OCC that would separate it from competitors like Chime and Monzo.</li><li>Colin Walsh, CEO and co-founder of Varo, told Business Insider getting a national bank charter will distinguish the startup in what has become of a crowded field of challenger banks and fintechs vying for Main Street's attention. </li><li>In the past year Varo has tripled its customer base and is expected to reach 750,000 registered customers this month, Walsh said. </li><li>The San Francisco-based startup also raised $100 million in a Series C round that closed earlier this year. </li><li><a href="https://www.businessinsider.com/prime?module=article&amp;area=summary">Click here for more BI Prime stories.</a></li></ul>Main Street has no shortage of options for where to park its money. Whether it's digital-only banks - known as challenger or neobanks - or investment apps that have grown into full-service offerings, the market for personal finance has arguably never been more saturated. And while there is no denying the newcomers <a href="https://www.businessinsider.com/challenger-banks-like-monzo-n26-and-chime-pose-a-disruptive-threat-2019-2">pose a significant threat to the traditional players</a> - such as JPMorgan Chase, Wells Fargo and Bank of America - the old guard does hold one significant advantage: national bank charters. No recent fintech or challenger bank has received a national bank charter from the Office of the Comptroller of the Currency. Instead, startups interested in offering checking and savings accounts are forced to partner with banks that do have charters, typically small regional firms known as sponsor banks, which then take a cut of the profits for their efforts.However, that could soon change for one challenger bank. <a href="https://www.businessinsider.com/fintech-startup-varo-money-receives-funding-round-2016-5">Varo</a> filed an application with the Federal Deposit Insurance Corporation on Monday. The FDIC application is one of the final steps the startup has to take to receive a national bank charter from the OCC, which it was granted preliminary approval for back in September 2018.The move comes just a few months after closing a $100 million Series C round that included over 40 investors including private equity firm Warburg Pincus, TPG Capital's The Rise Fund and Chinese-based Gopher Asset Management. Varo CEO and co-founder Colin Walsh declined to provide a valuation, citing the fact the company plans to raise another round before it goes live as an independent bank, but said to date Varo has raised $179 million.Walsh told Business Insider it's not sustainable to try and grow while continuing to run under a sponsor bank. As the digital bank grows, it could eventually pose a systematic threat to the bank its partnering with due to its size. The digital bank is also at risk if the sponsor bank gets caught up in regulatory issues that could impact its own business."You just don't control your own destiny when you're operating that model as much as you do when you're actually an independent bank," Walsh said. "Us having that sort of several-year lead on going through that regulatory process and getting on the other side of that regulatory process will allow us to compete in a way that many of the fintechs will struggle in terms of having the breadth of products and having some of the cost advantages."Read more: <a href="https://www.businessinsider.com/n26-german-digital-bank-backed-by-peter-thiel-us-launch-2019-7">A $2.7 billion German fintech startup backed by Facebook VC Peter Thiel is about to launch in the US</a>The charter application has been a long process - Walsh said initial conversations with the OCC began in December 2016 - but there is a light at the end of the tunnel. Following FDIC approval, the OCC would then do a final examination before granting a full charter. If the timeline hold ups, Walsh said Varo should be able to run as an independent bank in the first part of 2020. But <a href="https://www.businessinsider.com/google-paypal-not-interested-in-occ-fintech-charter-2019-6">not everyone in the industry sees the benefits</a> of a national bank charter the same way Walsh does. While several fintechs have explored the possibility of obtaining a national bank charter from the OCC in recent years, only two currently have applications submitted. Varo and <a href="https://www.businessinsider.com/robinhood-millennial-stock-trading-app-ignored-rules-money-safe-2019-7">Robinhood</a>, which applied for one in April, as reported by the <a href="https://www.bizjournals.com/sanfrancisco/news/2019/04/19/robinhood-fintech-bank-savings-checking-accounts.html">San Francisco Business Times</a>. European neobanks <a href="https://www.businessinsider.com/n26-german-digital-bank-backed-by-peter-thiel-us-launch-2019-7">N26</a> and <a href="https://www.businessinsider.com/uk-neobank-monzo-announces-its-us-launch-with-inperson-events-2019-6">Monzo</a>, which enjoyed success in Germany and the UK, respectively, both recently launched in the US without any definitive plans to try and obtain a national bank charter. An executive at one competitor told Business Insider he's happy to let Varo spend time and resources working on obtaining a charter. Once Varo gains approval, a playbook will have been established for what regulators are looking for, thereby making the entire process easier, the executive said.While Wash admits that Varo is doing a bit of heavy lifting by being the first challenger bank to try and gain a national bank charter, it's not as if the OCC will be keen to hand them out afterwards."I think it's a little bit of wishful thinking," Walsh said. "The regulators have to be cautious. ... To think all they have to do is swing by Washington, D.C. and pick one of these things up. They are sort of fooling themselves." And that's not to say Varo hasn't had time to focus on other areas of its business outside the charter application. In the last year it's tripled its customer base, according to Walsh. In July it will hit 750,000 registered customers, which comes just two years after launching its app in July 2017, he added. And there's also plans for a credit card, among other financial offerings, in the "not-so-distant future," Walsh said. By comparison, Chime, which launched in 2014, announced it surpassed 4 million bank accounts in June, quadrupling its user base over a one-year period. Monzo, which went live in 2015, eclipsed <a href="https://monzo.com/blog/2019/05/20/two-million">two million customers</a> in the UK in May with a reported 40,000 accounts opening every week, making it the fastest growing bank in the country. Meanwhile, N26 reported having over 2.3 million active users in Europe in January when it announced <a href="https://www.businessinsider.com/peter-thiel-backed-digital-bank-n26-raises-300-million-2019-1">closing a $300 million Series D round</a> valuing it at $2.7 billion. See more: <a href="https://www.businessinsider.com/uk-neobank-monzo-announces-its-us-launch-with-inperson-events-2019-6">UK digital-only bank Monzo is launching in the US - but getting American customers to sign on may be a challenge</a>As for Varo, with new investors come expectations of returns. And as its customer base continues to grow, the pressure to charge customers fees to generate a greater profit could rise.However, Walsh throws cold water on the idea, pointing to the benefits the charter will provide, including the ability to make money off deposits, something it can't currently do. "How do you avoid the desire to ratchet up fees over time? We won't need to," Walsh said. "It also runs against the philosophy of why the company was started in the first place. We really are authentically trying to help consumers that are feeling stuck." <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/amazon-ceo-jeff-bezos-richest-person-net-worth-billions-2018-12">Jeff Bezos is worth over $160 billion - here's how the world's richest man makes and spends his money</a></h3> <div> </div> </div>

Challenger bank Varo, which has raised $179 million from Warburg Pincus and TPG, just took a big step that might separate it from competitors like Chime and Monzo

<keyword id="6354720" type="PERSON" weightage="20" keywordseo="Ola">Ola</keyword> is continuing talks with several investors to raise funds and recently it picked up around $50m from a New York-based hedge fund. India's largest taxi aggregator Ola raised funds from hedge fund Tekne Capital Management, and the funding is expected to take Ola’s valuation to over $3 billion. The latest round comes after Ratan Tata's RNT Capital Advisors and US hedge fund Falcon Edge infused money in the startup. "Ola continues to be in talks with various investors, including Coatue Management for this round," a source familiar with the development told ET. As per reports, Ola’s market share in India will be around 65%, with Uber holding the rest. Ola is going aggressive in the country and is working on several projects, including introducing electric vehicles in cities. The latest funding also comes after Uber is embroiled in a cultural row. Uber has also been slapped with an intellectual property lawsuit from Google's parent Alphabet-owned Waymo.

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