India could see at the most 12 startups going public in the next 18 months. This, after the Covid pandemic taught lessons to the startups to grow profitably, Accel’s Prashanth Prakash said.
“Covid taught us a lot of lessons. One of the lessons for us startups was to grow – grow profitably. Some of the mature companies go for IPO, but it is a good journey for all companies that have started in this country, where everybody knows that profitable growth is the way to grow your company. This is a good trend,” he told NFA Post at a Behive Investech event here yesterday evening.
Asked how many Indian startups would go for IPOs, Prashanth said he expects 10 to 12 of them would go for IPOs in the next 12 to 18 months.
“I do not want to specifically mention any names, but I would say definitely in e-commerce space there will be one or two IPOs. There could be a couple of SAAS-based startups that may go for the IPO. There also could be two to three B2B companies in India that would opt for IPO. So, somewhere around 10 to 12 startups will go for IPO in next 12 to 18 months,” he said.
The development comes at a time when the Indian government is easing overseas listing norms for domestic companies and startups in markets like the US, UK, and Japan.
“There are some new challenges in IPO where there are global investments happening. There is a need for policy improvement. because there are new generation companies that are different than the traditional companies.
“I am hoping to see this happening as and when more companies go for IPO. The government might then be more aligned to encourage tech IPOs. In fact, the government is keen on more and more IPOs in the startup sector and easing regulations,” Prashanth said.
Of late, many companies have openly spoken about their IPO plans. Among them is fashion e-tailer Nykaa, eyewear retail chain Lenskart, edtech and online tutoring firm Byju’s, fashion e-tailer Nykaa, food delivery platform Zomato, logistics and delivery firm Delhivery, and insurance discovery platform PolicyBazaar.
Walmart-owned Flipkart and PhonePe, and online bill payments platform MobiKwik, reportedly is considering a public listing.
MobiKwik has already launched its IPO campaign by elevating its senior vice-president Chandan Joshi to the role of the company’s co-founder and chief executive officer (CEO).
Byju Raveendran, the CEO of Byaju’s, has reportedly shown interest in IPO but was yet to decide on the time frame.
Flipkart, according to media reports, also is preparing for an overseas listing this year. Flipkart is likely to choose between Singapore or the US for an IPO.
PolicyBazaar is keen on a Nasdaq listing at a valuation of $3.5 billion.
The present legal framework doesn’t allow Indian firms to directly list overseas, before getting themselves listed on the Indian stock exchanges. Therefore, firms like MakeMyTrip, have set up parent entities in other countries to be eligible for a foreign listing.
Firms like Reliance Industries and Infosys have used the American Depository Receipt and Global Depository Receipt route for accessing foreign capital.
