Govt's revamped chip push; Emergent turns unicorn

The Union Cabinet has cleared the India Semiconductor Mission (ISM) 2.0 to boost domestic chip manufacturing. This and more in today's ETtech Top 5.

Also in the letter:
■ Groww's strong Q1
■ Ather charges up
■ PayPal in play?

---

Electronics and information technology minister Ashwini Vaishnaw

The Union Cabinet has approved the Rs 1.27 lakh crore India Semiconductor Mission (ISM) 2.0, electronics and information technology minister Ashwini Vaishnaw announced on Wednesday. The mission represents a major escalation of India's bid to build an end-to-end chip ecosystem.

Scheme details:

• The government expects the programme to bring Rs 4 lakh crore in investments, Rs 2 lakh crore in production and Rs 1 lakh crore in exports.
• The scheme spans the entire semiconductor value chain – from sand and silicon ingot wafers to fabricated wafers, integrated circuits, and electronic bare components and subassemblies.
• Support will come via grants, equity co-investment and royalty-based funding for large chip design investments.
• Incentives go up to 40% for silicon fabs, 35% for other fabs and up to 30% for materials, gases, chemicals and semiconductor equipment.

Also Read: India's chip startups cross from prototype to production

Mobile push: Alongside ISM 2.0, the Cabinet cleared Rs 62,500 crore for the second production-linked incentive (PLI) scheme for mobile phones, reinforcing India's bet on electronics manufacturing.

• India's mobile phone output rose to Rs 5.5 lakh crore in FY 2024-25, up from Rs 2.14 lakh crore in FY 2019-20.
• Smartphones emerged as India's top export in calendar year 2025, with exports worth Rs 2.62 lakh crore, led by Apple.

Also Read: India's semiconductor startups see investor interest building

---

(L-R) Mukund Jha and Madhav Jha, cofounders, Emergent

Vibe-coding startup Emergent has raised $130 million, valuing the company at $1.5 billion and propelling it into the unicorn club just two years after launch.

Unicorn round:

• The round was led by Creaegis, with participation from MNI Ventures, Claypond Capital, Sentinel Global, Khosla Ventures, SoftBank, Lightspeed and Y Combinator.
• The new valuation is about 5x higher than it was six months ago.
• Emergent has now raised $230 million in total.
• The fundraise, however, is smaller than the $200-250 million round Emergent had initially targeted, sources told us.

The company last raised capital in January – a $70 million round led by Khosla Ventures and Masayoshi Son's SoftBank at a $300 million valuation.


CEOSpeak: Chief executive Mukund Jha told us the startup has reached an annualised revenue run rate of $120 million, up from $100 million in February and $50 million in January.

"From December to now, our user numbers and revenue have grown almost 4x. It's becoming clear that this will be a massive global category, and only a handful of players are at the forefront. This investment reflects the size of the opportunity we're operating in."

Also Read: ETtech Explainer: What Emergent's ARR reveals about AI's numbers game

---

Lalit Keshre, CEO, Groww

Investing platform Groww reported a strong first quarter, with profit almost doubling year-on-year and revenue climbing sharply, even as much of the broking industry struggled to add active clients.

By the numbers:

• Net profit: Up 94.4% year-on-year (YoY) to Rs 735 crore from Rs 378 crore, attributable to the company's shareholders.
• Revenue from operations: Rose 66% YoY to Rs 1,501 crore from Rs 904 crore.
• Sequentially: Total income slipped 0.3% from Rs 1,505 crore in the March quarter, while net profit rose 7% from Rs 686 crore.

Also Read: Groww says it overtook Angel One in commodities trading within a year of launch

Client uptick: Groww added 115,000 net active clients on the National Stock Exchange (NSE) in the June quarter. Over the same period, the broader broking industry lost around 257,000 active clients. The company credited the performance to stronger user retention.

However, new user additions to the transacting user base remained muted due to slower activity in capital markets, especially in initial public offerings (IPOs) and exchange-traded funds (ETFs).

But higher retention more than compensated for the slowdown, Groww said in its quarterly shareholder letter.


Also Read: Zerodha, Groww, Angel One, Upstox get Gift City nod to offer US stocks to Indian investors

---

(L-R) Swapnil Jain and Tarun Mehta, cofounders, Ather Energy

Electric two-wheeler (E2W) maker Ather Energy has approved a Rs 1,200-crore preferential issue as part of a broader Rs 2,700-crore capital raise.

Round details:

• Hero MotoCorp will commit Rs 960 crore via convertible warrants.
• India-Japan Fund (IJF) will invest Rs 200 crore through equity shares.
• Cofounders Tarun Mehta and Swapnil Jain will each infuse Rs 20 crore.
• The issue, subject to shareholder approval, increases the preferential allotment size from Rs 1,000 crore to Rs 1,200 crore.

When combined with the proposed Rs 1,500-crore qualified institutional placement (QIP), Ather's total fundraise will go up to Rs 2,700 crore from the previously planned Rs 2,500 crore.

Also Read: E2W startup E3 Electric.Ai raises Rs 100 crore in equity, debt

Stake impact:

• Hero MotoCorp's stake in Ather will rise to 30.68% from 29.48%.
• IJF's holding will increase to 6.02% from 5.75%, assuming full conversion of the warrants.

Also Read: D2C snack brand Open Secret raises Rs 50 crore funding

---

Stripe and Advent International have reportedly teamed up to bid for PayPal Holdings, offering $60.50 per share in a deal that values the payments giant at more than $53 billion, Reuters reported.

More on the deal:

• The offer, made earlier this month, is backed by about $50 billion in committed financing from banks.
• It represents a 28% premium to PayPal's closing price on Tuesday.
• Under the proposal, Stripe and Advent would each own an equal stake in PayPal rather than splitting up the company.

However, the report said there is no certainty the deal will go through.

Background: Stripe and Advent first approached PayPal in early April. They are yet to receive a response and are aiming to reach an agreement by the end of the month, the report added.