According to a report by a consultancy firm, ‘Redseer’ India will have over 100 profitable startups in the coming 5 years. 20 startups have registered and around 80 startups will also likely go public with their IPOs.
HSBC in collaboration with Redseer said “India may see 100+ matured, large-scale profitable/path-to-profitability start-ups in the next five years. With about 20 of them already being listed, about 80 start-ups have the potential to look at an IPO journey.” Currently, 9 startups have given their drafts to the market regulator securities and exchange board of India (SEBI), with 10 startups being commissioned. The report further mentioned that India has great potential to grow. The new-age tech companies account for just about 1% of the $3.9 trillion of India’s public market as against 25% of the $43 trillion capitalization in the United States.
Startups will follow a focused approach to IPO, putting the focus on metrics such as leadership, TAM, multiple use cases, consumer interaction, predictable revenues, sustainable unit economics, and a clear path to profit.
The Redseer report also stated “We have learnt from the ecosystem stakeholders, bankers, and public market investors that, for going public, one still needs a lot of relationship development early in the journey and not closer to the event. Engagements need to be at least two years ahead of the event. CFOs should have an independent stand that the investors should look forward to. Finally, building strong governance that you as a company have and follow leaves little room for surprises.”
In the month of November, a founding partner of a VC firm Accel Prashanth Prakash said that “at least 25 start-up unicorns in India will hit the public market by launching IPO in the coming 3 to 5 years. Further adding he stated that it is time Indian start-ups focus on profits which will create multigenerational companies and great IPOs so that the ecosystem can return the $150 billion of venture investment the country has absorbed back to investors.
“If we don’t return money back to our investors, we are not going to get new capital into this country. My prediction is that of the 100 unicorns, we will have a massive supply chain of IPOs, at least 25 of these unicorns will go IPO in the next 3-5 years, and through this, we will be able to create multiple billion dollars of exit that is required to return money back to our investors globally and in India which will create a virtuous cycle of more investments coming into the start-up ecosystem,” said Prashanth Prakash during the 25th edition of Bengaluru Tech Sumit inauguration function.
Rohan Agarwal Strategy Consultants Partner said “The learning is that there may be more time, maybe a few quarters, for the markets to recover. We always see IPOs bouncing back post downturns.”
