Daybreak Friday: UPI blinks, Google faces a $4.7B fine, LIC to shoulder India's oil bill, and more

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Hello, it is Friday the 3rd of July, and today we are doing a roundup. Four stories from the week, and running underneath all of them is a single question. When the bill arrives, what do you pay it with?
The Government of India is answering that question which shares in some of the country's largest public sector companies.
OYO's parent company is answering it with money from investors it hasn't even met yet. And Google spent 8 years arguing that it should not have to answer this question at all. And this week, Europe's top court disagreed. And then there is UPI, which has never sent anybody a bill in its life, and whose latest numbers hint at why that might eventually become a problem.
Let's start with a company that probably insures somebody in your family. LIC is the country's largest insurer, and its biggest shareholder by a very long way is the Government of India.
Bloomberg reported yesterday that the government is speeding up plans to sell small slices of its holding in eight public sector companies. Only two have been named so far. LIC, where a sale could bring in as much as 10,000 crore rupees and Hindustan Zinc, which could add another 5,000 crore rupees. The rest are state-owned banks, where the government has more than 90% shares. Business Standard has reported that the plan includes Punjab & Sindh Bank, Indian Overseas Bank and Yuko Bank. And this is an acceleration of something that was already in motion. The government had sold 1.6% shares of Hindustan Zinc as recently as November last year, for about 3,500 crore rupees. And it has set itself a target of 80,000 crore rupees this year from stake sales and public assets. So, why the hurry? The answer is kind of obvious. Oil. India imports most of its crude, and the American war in Iran sent Brent past $100 a barrel earlier this year, as strikes and ship attacks choked exports out of the Gulf. There is a ceasefire now, but prices have not come back down to comfortable levels. But here is the twist. The government doesn't actually need oil as an excuse. You see, SEBI requires every listed company to keep at least 25% of its shares with the public. Several PSU banks are nowhere near that. And a deadline arrives this August, and it has already been extended twice.
LIC has until May 2027 to get its public flow to 10%.
So on paper, every one of these sales is actually just compliance. Except the deadlines have not moved, and the pace of selling suddenly has. But all this hurrying actually has a price too. Offers or sales usually go out at a discount. The more urgently the government needs the money, the cheaper each slice risks getting.
From the state selling equity to a startup doing the same. You know OYO, the big red logo on budget hotels in every Indian city and one of the most famous startups that this country has produced. The company behind it is now called Prism. And this week, Prism filed its updated IPO papers with SEBI. It wants to raise 6,650 crore rupees, all of it through new shares. No existing investor is selling, and the company is presenting this as a vote of confidence. Now, look at where the money is going to go. Nearly 5,000 crore of this, which is three quarters of the raise, is earmarked to repay debt. So basically, the public is being invited in largely so that the lenders can be paid off. To be fair, the business is now in a better shape than during its last two attempts at listing.
Revenue for the first nine months of this financial year was nearly 7,000 crore rupees, and that is more than the whole of last year. Profit roughly tripled to 748 crore rupees. But here is the part that might surprise you. The company is barely Indian anymore. More than 84% of its revenue comes from outside of India. The United States alone accounts for over half of its global gross booking value after OYO bought G6 Hospitality, which is a chain of American budget motels. So the startup listing in Mumbai as one of India's most awaited IPOs is operationally an American budget hotel company with a portfolio of European vacation homes attached. And finally, there is also the valuation. In 2021, OYO wanted a valuation of nearly $12 billion, but now reports peg it to $7-8 billion.
And now on to something that you probably used this morning. UPI, the country's famed payment system.
NPCI, its parent, released its June numbers this week, and for the first time in a long time, they fell. Transaction values dropped 3% from May to 28.92 trillion rupees, and volumes slipped by 2% to 22.72 billion rupees. Now, before you panic, some context. May was actually the biggest month in UPI's history. June was still up more than 20% compared to the same month last year. And the daily numbers were basically flat. So this looks like a breather after a record. And that is how I would like to read it to for now. But this dip raises a question that the ecosystem prefers to postpone every time.