New Unicorns and Race to IPOs
Indian market resumed on its Bull run and scaled new all-time highs in the past week, rising around 1.5% in the week. Midcaps were the clear outperformers this week! Midcaps and Smallcaps bounced back around after several weeks of underperformance.
Nifty is now eyeing the next target of 17000, but this might be a difficult tread, the main reason being lack of conviction and support from the Bank Nifty which has consistently underperformed compared to the Nifty in the last weeks! Analysts maintain a positive, but cautious approach on the indexes!
Major market movers next week will be mostly via Global cues, Q2 GDP print, and auto sales numbers!
Why are Unicorns increasing every day in India?
India has a total of 24 unicorn startups in the year 2021 as of August.
This includes Digit Insurance (insurtech), InnovAccer (healthtech), Five Star Business Finance (NBFC), Meesho (social commerce), Infra.Market (B2B ecommerce), CRED (fintech), Pharmeasy (healthtech), Groww (fintech), Gupshup (conversational messaging), Mohalla Tech (parent company of social platforms ShareChat and Moj), Chargebee (SaaS), Urban Company (home services marketplace), Moglix (B2B commerce), Zeta (fintech), BrowserStack (SaaS), BlackBuck (logistics), Droom (automobile), OfBusiness (B2B commerce), BharatPe (fintech), Mindtickle (sales enablement), upGrad (higher education), CoinDCX (the first Indian crypto startup to reach unicorn status), Eruditus (edtech), and Zetwerk (B2B manufacturing).
There was a time when only startups like Paytm and Flipkart were known to be the unicorns India have, but now this has stretched to almost every domain like healthtech and crypto.
What are the reasons for such growth in the number of Indian unicorns?
Big Names from India
Start-ups like OYO, OLA, Paytm and Flipkart have made a name for themselves across the globe, which is attracting more and more investors to invest in Indian startups and ideas.
Support from Government
The Indian government is supporting the growth of startups and it is providing them with many relaxations and benefits.
Large User base
With a population of more than 1.3 billion Indians, it is easy for any startup to acquire millions of people with its product and make a huge profit.
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Race to IPO, but abroad, please!
Despite being founded in India, some Indian startups are looking to list abroad. Flipkart, InMobi, Curefit, OYO, Lenskart, Urban Company are Indian startups registered in overseas jurisdictions such as Singapore, UK, and Mauritius. A lot of reasons are there which gives startups a reason to list abroad an edge over listing in India.
Indian companies gain access to specialized investor classes who are able to better value securities, thus improving valuations. This is especially for emerging high-growth companies in technology that may not be profitable.
Revenue generation is the first thing for which startups go. Revenue in developed countries is way more than the domestic market Revenue chart of Infosys in different countries
Broader investor base
Listing overseas enables access to a larger pool of international investors, allowing companies to diversify their investor base.
Overseas listing enhances brand awareness in various developed markets such as the US and Europe.
Ease of Business
India still remains a marketplace were running a business is not soo friendly, with strict rules around various aspects, many financial moves are highly regulated.
All these reasons indirectly or directly contribute to the motivation of the startups to list abroad!
Tweet of the Week
Vala Afshar is the Chief Digital Evangelist at Salesforce and tweets regularly about some interesting topics! Do give a follow to his account!
Book of the Week
Do you have a hobby you wish you could indulge in all day? An obsession that keeps you up at night? Now is the perfect time to take that passion and make a living doing what you love. In Crush It! Why NOW Is the Time to Cash In on Your Passion, Gary Vaynerchuk shows you how to use the power of the Internet to turn your real interests into real businesses.
Let us know in the comments what do you think about this week’s Newsletter and feel free to add any suggestions!