More money is chasing Indian tech starters as investors avoid Chinese names

Zomato’s food delivery partners can be found on the roads of Kolkata, India.

Debarchan Chatterjee | NurPhoto | Getty Images

More money is chasing Indian starters when investors are selling Chinese tech stocks.

The share of food delivery app Zomato surged 82% when it debuted on the Indian National Stock Exchange on Friday.Initial public offering Sold for Rs 76 per share, Or just over $ 1 per share. The stake opened more than 50% higher and the value of the company was approximately 910 billion rupees or 12.2 billion dollars.

Jayasanker Bencataraman, head of equity capital markets at Kotak Investment Banking, said the IPO was oversubscribed for institutional and individual investors before the deal began.

“I think Zomato’s successful IPO may open the lock,” said Anirudh Suri, founding partner of the Indian Internet Fund. Sri has invested in 20 start-ups across India.

High tech giant Uber Last year, we sold our Indian food delivery business to Zomato and made a full-stock transaction that transferred our shares to a US company. Zomato’s other prominent backers include Indian internet company InfoEdge. Alibaba-Affiliated company Ant Group and Singapore’s national investor Temasek.

Sources told CNBC that Zomato plans to make its debut in the United States after listing on India.

Regarding which companies will be released next, Mr. Suri said that Softbank in Japan, Ant Group, and Berkshire Hathaway..

Indian payment company Paytm I recently submitted an IPO document We aim to raise $ 2.2 billion in our public debut in November this year.

Overall, Indian start-ups raised $ 12.1 billion in the first half of this year, compared to $ 5.3 billion raised in the same period last year, according to Venture Intelligence.

What is behind the recent pivot to India?

Venture capital IVP general partner Somesh Dash said investors are awakened to the idea that China no longer has the best growth story in town.

“There aren’t many young people in China. There are young people in India. The Indian economy shows a growing middle class and a dynamic workforce, one of the largest in the world. In the long run. It ’s very attractive. ” Dash said.

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Amit Anand, co-founder of exchange-traded fund Next Fins, expects high-tech IPOs in India to be priced in premium multiples compared to Chinese companies because of growing internet penetration.

“Investors recognize the long way to go for the Internet. India’s e-commerce penetration is 7% compared to China’s 25%. India’s smartphone penetration is about 30%, 60% in China. It’s less than half of that, “formerly Axial Capital.

Next Fins Anand and his partner Nifty India Financial Investors want to increase their exposure to India’s long-term growth story, especially as Internet and smartphone penetration continues to rise. INDF assets have tripled since the beginning of the year and have increased by 50% since June.

“Investors are betting that as these people join the workforce, they will consume and need more financial products such as credit cards, mortgages and car loans. Therefore, e-commerce and fintech companies Was the main beneficiary of venture capital investment in India, “said Anand. With more tech companies listed in India, he is currently planning to launch an ETF focused on Indian tech stocks.

“The Indian Technology Index is currently tracking large outsourcing companies. Neither Indian nor US investors have a way to target fast-growing Internet companies,” he said.

Taking advantage of India’s keen interest in technology, some of the country’s unicorns, companies worth more than $ 1 billion, continue to raise additional rounds. Softbank-backed hotel startup Oyo has raised an additional $ 660 million. E-commerce platform Flipkart has raised $ 3.6 billion at a very high valuation of $ 37.6 billion, the largest funding for Indian companies.Major investors include the Canadian Pension Plan Investment Board Walmart..

Like China, data privacy issues exist in India. Last week, Indian regulators banned Mastercard from issuing new credit cards to domestic customers after failing to comply with data privacy regulations. The key question that venture investors are trying to answer is whether the Government of India will pave the way for itself or will it follow China’s initiative on topics related to regulation and listing abroad.

More money is chasing Indian tech starters as investors avoid Chinese names

Source link More money is chasing Indian tech starters as investors avoid Chinese names

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