Happy Friday! Study-abroad loans have fallen sharply in 2025, with the US corridor feeling the brunt of the decline. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ New consumer VC in town
■ Cars24’s IPO plans
■ Wage rules squeeze IT

Student loan companies feel the pressure of US visa squeeze

India’s study-abroad lending market is facing its sharpest contraction in years. Disbursements in calendar year 2025 are estimated to be down 30–50% from the previous year, with the US corridor, historically the sector’s backbone, taking the biggest hit.

What’s happening?

• Study-abroad loan disbursements fell 30–50% in 2025, according to NBFCs and education-loan platforms.
• The US-UK corridor, which typically delivered the largest ticket sizes and the best repayment visibility, has weakened as visa scrutiny and job uncertainty rise.
• Europe (France, Germany, and Eastern Europe) and Australia are picking up some slack, but they usually come with smaller loans and less predictable post-study salaries.
• Lenders, such as Credila, InCred and Avanse, are being pushed into domestic and job-linked education, but that changes the economics. Smaller loans mean many more borrowers for the same book, while customer acquisition costs stay high.

The data point: RBI outward remittances for education (tuition plus living costs) show the slowdown clearly:

• Aug 2025 (fall intake): $319 million, down 23% year-on-year (YoY)
• Jan 2025 (spring intake): $368 million, down 18% YoY

Why it matters: The US corridor anchored the industry, with Rs 40-50 lakh loan sizes and clearer repayment options. While new domestic alternatives (ISB, Master’s Union, and Mesa School) can take Rs 20–30 lakh loans, they often lack new product structures and rely on standard education loans. Working-professional education and online courses are safer options, but with ticket sizes of Rs 2–5 lakh, they cannot replace overseas economics.

What’s next?

• A 1–2 year soft patch in fresh disbursals and loan-book growth.
• Greater reliance on India-linked and job-linked programmes.
• Study-abroad demand is delayed rather than destroyed, but lenders with heavy US/UK exposure will feel the strain the most.

Also Read: US sounds warning to incoming students; these visa violations may cost you your future

No tax exemption for Tiger on Flipkart stake sale: SC

In a decision that could reshape how foreign investors structure India-linked deals, the Supreme Court has denied Tiger Global the tax treaty protection it claimed on a transaction tied to Walmart’s 2018 acquisition of Flipkart.

What’s happening?

• The Supreme Court overturned a Delhi High Court ruling that had exempted Tiger Global’s Mauritius-based entities from paying capital gains tax.
• Tiger had relied on the India-Mauritius tax treaty, which allows Mauritius-based investors to avoid capital gains tax on certain indirect transfers of Indian assets.
• The Income Tax department argued that the Mauritius entities were created primarily to avoid tax and lacked any real business “substance.”

The backstory:

• In 2018, Walmart bought about 77% of Flipkart for $16 billion, valuing the ecommerce firm at $22 billion. As part of that broader transaction, Tiger Global sold the shares it held in Flipkart’s Singapore-based holding entity to another foreign investor affiliated with Walmart.
• Flipkart’s Singapore entity, in turn, owned shares in the ecommerce company’s India unit. Because Tiger sold shares of a foreign company rather than the Indian entity directly, it claimed the deal was an “indirect transfer” and therefore tax-free under the India-Mauritius treaty.
• The Authority for Advance Rulings rejected this in 2020, stating that the structure was designed solely to avoid tax. The Delhi High Court later sided with Tiger in 2024. The Supreme Court has now reversed that ruling.
• The tax demand raised on Tiger Global amounts to Rs 14,500 crore ($1.7 billion at today’s exchange rates). This includes penalties and interest accumulated since the first demand. Tiger Global’s total proceeds from the Flipkart stake sale were around $1.6 billion.

What now?

• The court ruled that treaty benefits cannot be claimed if the transaction is an impermissible tax avoidance agreement.
• The exact tax and penalties Tiger may owe will depend on the gains it made from the sale. A review petition is possible, but rarely successful.
• The ruling could have ramifications for other venture capital firms with Mauritius vehicles.
• These include Peak XV Partners, Accel India, Lightspeed India, Blume Ventures, Kalaari Capital, and Stellaris Venture Partners.

Also Read: Tiger Global returns to roots with smaller VC goal; launches $2.2 billion fund

VC firm Kairon debuts with Rs 200-crore fund

Deepankur Malhotra, founder, Kairon Capital

Former Amazon India executive Deepankur Malhotra has launched a new consumer-focused venture capital firm, Kairon Capital, with a target fund size of Rs 200 crore, including a Rs 50-crore greenshoe.

The game plan:

• The fund has already closed Rs 90 crore in the first round, with backers including Emami and D2C founders such as Saurabh Jain (Livspace) and Rohit Chawla (Innovist).
• It plans to back 14–15 consumer startups, investing from seed to early Series A.
• Cheque sizes will range from Rs 2 crore to Rs 14 crore.
• With capital in hand, the firm has begun active deployment, with first investments planned shortly.

Quote, unquote: “The segment we’re focused on sits between early experimentation and scaled institutional capital. There are many consumer businesses that have figured out what works but are still underserved when it comes to thoughtful, founder-aligned capital at the right stage,” Malhotra said.

Also Read: As VC exits pile up, 2026 will test fundraising prospects of independent funds

Other Top Stories By Our Reporters

Cars24 CEO Vikram Chopra

Cars24 plans to go public in next 12 months: CEO Vikram Chopra | Used-car sales platform Cars24 is planning to go public in the next six to 12 months, founder and chief executive Vikram Chopra said after the company reported an improvement in revenue growth in the first half of FY26.

Labour code rollout looms large over margins of IT firms: Operating margins have compressed by 70-210 basis points at Tata Consultancy Services (TCS), Infosys, and HCLTech after the companies took combined one-time provisions of Rs 4,373 crore in the December quarter to account for past service costs. However, this is likely to result in recurring wage bill inflation of 3%-5%, potentially impacting the upcoming increment cycle, experts said.

India ranks second in global Claude.ai usage: Anthropic’s McCrory | India is the second-largest user of Claude.ai worldwide, with nearly half of all activity attributed to work-related use tasks, Peter McCrory, head of economics at Anthropic, told ET. India’s work-to-personal usage split is unusually high compared with peer countries, indicating that AI adoption here is primarily driven by productivity.

Global Picks We Are Reading

■ Apple sits out AI arms race to play kingmaker between Google and OpenAI (FT)

■ The real AI talent war is for plumbers and electricians (Wired)

■ Is a billion dollars still cool? (Rest of the World)

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