Is The Grass Greener For Unicorns?

An unstoppable rally is being witnessed among the start-ups when it comes to initial public offerings. But, once listed, companies fall into the greater purview of the government, the market, and investor sentiments. We talk about the challenges and criticisms these start-ups may face after entering the new domain

- Ankita Mukhopadhyay

After years of investors pumping money into the stock market, sometimes with no end in sight, there seems to be hope for unicorn-rich India.

Following Zomato, the largest food delivery company in India by market share, that filed for an initial public offering (IPO) as early as April and was listed in July, a host of start-ups have queued up to float their offers.

The ongoing bull run also gives these companies an opportunity to aggressively price their shares.

FSN E-Commerce (Nykaa), One97 Communications (PayTM), and PB Fintech (owner of PolicyBazaar) have already joined the IPO bandwagon. So, is the Indian stock market experiencing a new lease of life?

The Growth Potential Of India

The multi-billion-dollar listing of Zomato and potential listings of Nykaa, PolicyBazaar, and PayTM are part of renewed investor interest in the Indian market. “Investors are betting on India’s growth potential,” said Aviral Bhatnagar, a junior VC at Venture Highway, an early-stage VC. Retail investors are considered to be the most buoyant group subscribing to the IPOs.

History shows that liquidity tailwinds have been the biggest stimulant to raise equity returns.

Excess global liquidity created by easy monetary policies of central banks around the world has led to rising stock markets, believes Rajan Gulati, an equity analyst based in Delhi. “An uptrend market, like it’s right now, helps companies to list at good valuations and raise more capital through the listing,” Gulati told Outlook Money.