India has a strong pipeline of 80 IPOs over next 5 years
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While the stock performances of tech IPOs, compared to other consumer companies, witness a steeper crash, India is poised to see more than 100 large-scale profitable/path-to-profitability startups 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, according to a report by Redseer Strategy Consultants with HSBC.
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," the report added.
In India, with about a $3.9 trillion market capitalisation, only about 1 per cent can be attributed to tech/new age companies.
There are a lot of metrics here that the start-up will need to focus on in their IPO journey, including market leadership, clearly visible TAM, moats/multiple use cases, diversified, consumer love, predictable revenues, high operating leverage, achieved sustainable unit economics and a clear path to profitability.
"We are just getting started with the journey of start-ups coming up and going towards their path to profitability, then looking at that public market journey," said the report.
