IT slide meets Q1 earnings; Sebi greenlights Rentomojo IPO

A sharp fall in IT stocks has put the sector under pressure ahead of the June-quarter earnings season. This and more in today's ETtech Top 5.

Also in the letter:
■ Flipkart's second Esop
■ Suzuki's rural startup bet
■ WhatsApp secures govt extension

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India's IT sector is heading into the June-quarter earnings season under pressure, with investors scanning every line of commentary for signs of a turnaround after a deep correction in tech stocks.

What's happening? The combined market value of 10 major IT companies has dropped by over Rs 17 lakh crore from their peaks, turning this earnings season into a crucial sentiment rest. So far, though, brokerages expect the sector to stay under strain.

How far have the bellwethers fallen:

• TCS: Down 56% from Rs 4,592.25 (August 30, 2024) to Rs 2,033, wiping out over Rs 9.12 lakh crore in market value.
• Wipro: Down 54% from Rs 369.93 (October 14, 2021).
• LTIMindtree: Down 53% from Rs 7,588.80 (January 4, 2022).
• Infosys: Down nearly 50% from Rs 2,006.45 (December 13, 2024) to Rs 1,006.

Source: ACE Equity, Ritesh Presswala

Muted outlook: Morgan Stanley expects a weak June quarter, cautious management commentary for the September quarter and possible cuts to FY27 revenue guidance. Kotak Institutional Equities is modelling June-quarter growth in a tight -1% to +1% band, pointing to the West Asia conflict and AI-led pricing pressure.

Pressures mount: Alongside weak discretionary spending, the sector is also dealing with slower client decision-making, pricing pressure on contract renewals, higher AI investments, and fears that AI-driven productivity gains could ultimately cap revenue growth.

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Geetansh Bamania, founder, Rentomojo

Online furniture and appliance rental platform Rentomojo has secured approval from the Securities and Exchange Board of India (Sebi) to launch its initial public offering.

IPO details:

• Draft red herring prospectus (DRHP) filed in March 2026.
• Rentomojo plans to raise Rs 150 crore through a fresh issue of shares.
• The offering includes an offer for sale (OFS) of up to 28 million shares.
• Face value: Re 1 per equity share.

Rentomojo plans to deploy the fresh capital to repay debt, pay lease rentals or licence fees for warehouses and experience stores, and fund general corporate purposes.

Financials:

For the six months ended September 30, 2025:

• Revenue from operations: Rs 176.61 crore
• Profit after tax: Rs 61.38 crore

For FY25:

• Revenue: Rs 265.96 crore
• Profit after tax: Rs 43.11 crore

Founded by Geetansh Bamania, who also serves as chief executive, Rentomojo estimates it holds 42-47% share of India's organised home furniture and appliance rental market.

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Kalyan Krishnamurthy, CEO, Flipkart

Flipkart has launched another employee stock ownership plan (Esop) liquidity programme, allowing eligible staff to cash out part of their vested stock options over the past three years.

Driving the news:

• Walmart-owned Flipkart has earmarked a $50 million corpus for the programme.
• Eligible employees can liquidate up to 5% of the stock options vested over the past three years at Rs 713.4 per option, according to an internal email from group chief executive Kalyan Krishnamurthy.
• The payout will be made in August 2026.

Previous liquidity event: Flipkart had announced its first Esop buyback in July 2025, benefiting around 7,000-7,500 employees.

The announcement comes as Flipkart moves into what Krishnamurthy described in the email as its “next chapter as an India-domiciled company”. The company has been working on shifting its holding structure to India, a move widely seen as a precursor to an eventual public listing.

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Vipul Jindal Nath, CEO, Next Bharat Ventures

Suzuki Motor Corporation subsidiary Next Bharat Ventures has launched a Rs 2,000 crore impact fund aimed at startups serving rural and underserved communities.

Fund details:

• Focus areas: agriculture, healthcare, financial inclusion, rural mobility, supply chains and AI for social impact.
• Target portfolio: around 50 startups over three years.
• Capital allocation: roughly half the corpus reserved for follow-on rounds.
• Average cheque size: $500,000–$1 million, according to founder and chief executive Vipul Jindal Nath.

Tell me more:

• The new fund follows its first Rs 340 crore fund.
• Over 90% of its portfolio startups are moving towards profitability, the firm said, with several already running business pilots in Japan.

Also Read: Investors rush to fund solutions for India's AI power crunch

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Meta-owned WhatsApp has secured more time to respond to the government's notice regarding its proposed username feature – and has reportedly promised not to roll out the feature in India until talks conclude.

Driving the news:

• WhatsApp has been granted an additional three days to file its reply after seeking more time, according to PTI.
• The company has assured the government it will keep the feature on hold in India while consultations are underway.

Tell me more: The Centre, in a notice issued to Meta last Wednesday, warned that the username feature could raise the risk of online fraud, phishing, so-called digital arrest scams and impersonation.

The feature would let users connect on WhatsApp without sharing their phone numbers.

Also Read: Zoho's Arattai to drop username feature amid WhatsApp controversy

Delhi's ask: The government asked WhatsApp to pause the India rollout until consultations are completed to its satisfaction.

Zoom out: The move comes amid broader regulatory heat on big messaging and social media platforms.

• Meta is already under scrutiny over Instagram ads linked to child sexual abuse material.
• Telegram is facing action over piracy on its platform.

Also Read: ETtech Explainer: Inside the Instagram child sexual abuse ad controversy