Clean Label Brands Vs FSSAI, PhonePe Eyes 2027 IPO & More

The Clean Label Credibility Test 

India’s clean-label boom is facing its toughest test yet. FSSAI’s recent crackdown on health and purity claims is threatening the marketing language that helped many D2C brands grow. Can “healthy” food startups survive when every claim must stand up to evidence?

The Label Under Fire: FSSAI’s recent notices to 20 legacy and D2C brands has brought claims such as “100% natural” and “healthy” under scrutiny. Brands built on “ingredient transparency” were caught using date powders and fructose while advertising zero added sugar. Rather than challenging the FSSAI’s notices, several brands quietly opted to scrub these absolute claims and overhauled their packaging. 

But the situation took a sharp turn after the SC began questioning what a front-of-pack warning label should look like. 

SC Weighs In: The apex court accepted FSSAI’s proposed red hexagon warning for packaged foods high in sugar, salt and saturated fat. At the same time, it also sought more clarity on scientific thresholds, label size and possible confusion with existing food markers. The next hearing in the matter could establish a clearer path for how health warnings must appear, potentially reshaping packaging and product listings across India’s food market.

Trust Needs Proof: Experts believe that the crackdown can potentially create a better opportunity for brands to demonstrate better ingredients, transparent formulations and verifiable nutritional claims. However, it will raise the cost of entering the category and will require the brands to rethink product formulations. 

So, will new-age food brands adapt or will this regulatory reckoning shatter consumer trust in “clean-label” promises? Let’s find out…

From The Editor’s Desk

PhonePe Eyes 2027 IPO

• The Walmart-backed fintech giant has revived its IPO plans after the Centre introduced a new MDR framework for UPI. PhonePe is now targeting a listing between February and March 2027.
• PhonePe will now look to file its updated draft red herring prospectus with SEBI by the end of this year, seeking a valuation of $10 Bn. 
• The fintech major had confidentially filed its DRHP with SEBI in late-2025 and received approval for an OFS-only issue earlier this year. The startup later postponed its IPO plans citing global market volatility and escalating geopolitical tensions in West Asia.

Lendingkart Finance’s Q1 Snapshot

• Lendingkart’s NBFC arm managed to narrow its losses by 62% YoY to ₹32.4 Cr in Q1 FY27, signalling that the sharp deterioration seen through FY26 may be bottoming out. Meanwhile, operating revenue also tanked 55% YoY to ₹52.7 Cr.
• The company also booked a net loss of ₹70 Lakh on fair value changes and a ₹80 Lakh loss on assignment of loans in Q1. During the quarter, the NBFC also transferred stressed loans worth ₹94.7 Cr to an asset reconstruction company for a consideration of ₹2 Cr.
• Lendingkart Finance, which is a wholly-owned subsidiary of Lendingkart Technologies, serves as the licensed lending vehicle for the group’s MSME-focussed digital lending business. Fullerton Financial Holdings took over the group in a fire sale in 2024.

VerifAIX Bags $5 Mn

• The AI-native semiconductor verification startup has raised about ₹48 Cr in its seed round co-led by Endiya Partners and Bluehill VC to accelerate product development, expand deployments and grow its engineering teams in India and the US.
• Founded in 2024, VerifAIX is developing an AI-native platform to help semiconductor engineering teams verify chip designs. Its platform flags gaps and potential errors in chip specifications and recommends fixes.
• The fundraise comes amid growing investor and policy interest in India’s chip ecosystem. At the heart of this push is the homegrown semiconductor market, which is projected to become a $155 Bn opportunity by 2031.

UPI Concentration Eases In August

• Sachin Bansal-led Navi improved its UPI market share, in terms of transactions, to 4.4% in August, marking a steady climb in a market still dominated by PhonePe and Google Pay. Navi processed 108 Cr transactions worth ₹52,512 Cr last month.
• PhonePe remained the market leader and processed 1,125 Cr transactions worth ₹14.3 Lakh Cr in August, but its volume share slipped to 45.9% during the month. Google Pay’s market share also edged down to 32.4% from 32.5% in July.
• The timing is significant as UPI is all set to be monetised. Payments above ₹2,000 will attract a 0.4% MDR starting October 15, potentially making scale and merchant activity more valuable for payment apps than they were under the zero-MDR regime.

RentoMojo’s IPO Windfall

• Shares of the furniture and appliance rental startup are all set to list on the bourses later today. Ahead of the D-Street debut, the IPO’s offer for sale component delivered sizeable returns for the platform’s early backers as well as cofounder Geetansh Bamania.
• While Bamania pocketed ₹34.31 Cr by selling 8.49 Lakh shares, Accel sold shares worth ₹317 Cr – translating into a gross return multiple of 8.6X. Madison India also pocketed raked in ₹96.9 Cr, clocking a gross return of 7.2X. 
• RentoMojo’s ₹1,256 Cr IPO comprised a fresh issue of shares worth ₹150 Cr and an OFS of up to 2.74 Cr shares worth ₹1,105.6 Cr. Its public issue received bids for 158.68 Cr shares against 2.18 Cr shares on offer, taking the overall subscription to 72.88X.

Inc42 Markets

Inc42 Startup Spotlight

Can Discovered Materials Help Chips Beat The Heat With AI?

As AI chips grow more powerful, heat and material limitations are threatening to slow the semiconductor progress. Discovered Materials is tackling this bottleneck with AI agents that can search, simulate and validate new materials for advanced chips.

Materials Science Meets AI: Founded in 2026, Discovered Materials uses AI agents to accelerate the discovery of new materials for semiconductors. Its AI agents generate candidate structures and estimate properties and distinguish theoretically-attractive candidates from materials that can ultimately be manufactured and deployed.

Beyond Discovery:  The startup claims to have so far generated more than 500 previously unknown materials, which it claims are computationally stable. However, only a small number may have plausible synthesis routes. To address this, Discovered Materials is building experimental and verification capabilities that connect candidate generation to synthesis and lab validation. 

The IP Ambition: The US-based startup’s long-term ambition is to become a materials and intellectual-property company, potentially licensing discoveries to semiconductor and chemical companies. It also plans to focus on expanding its laboratory infrastructure and computational capabilities. 

With India’s semiconductor market projected to become a $155 Bn opportunity by 2031, here is how Discovered Materials is searching for cooler chips, one material at a time…

Infographic Of The Day

Some of India’s biggest startups were started by engineers, who went from classrooms to building billion-dollar companies. So, which campuses are producing the founders behind India’s unicorn boom?

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