In history whenever some small or big company need money they are announcing IPO and raise fund from stock market…
But now days situation going in different direction
In india we have company like
Paytm, zometo, swiggy, oyo rooms… and many more
whenever this startups needs money for ther business growth they all are raising fund from VC ( venture capital)
So right now the situation is
company like oyo rooms and Paytm have valuation more then Rs-65,000 crore
So in future what happen if all startups raise fund from VC’s?
Today we are talking that how company like Wipro, Reliance, tcs and many more are creating great wealth for ther investors
Buz those company announce IPO when they are really small in terms of size but today more then 60,000 crore of valuation companys are not listed in indian stock market bcz they are getting money from VC’s
It’s possible that I’m missing some points in this topic
So @nithin Sir can you through some light on this topic and share your view with us?
VC’s are venture capitalist, if one understand what is VC and their working model we can conclude at some point they want to exit with much superior returns to their investments because they need to exit to make returns to the investors in VC/PE funds.
Times have changed, VC/PE was not quite popular during those times in India.
No, this is not right. Size doesn’t matter for any company to hit for IPO, some times it depends on capital requirement and it’s availability, sometimes it is just a way to show exit to early investors (VC/PE).
But I agree with you on wealth creation, all VCs/early investors are squeezing out the last drop of juice before letting it go for IPO, as a retailer we should not expect these new aged unicorns to give returns the way how infy/reliance or wipro delivered for retailers. Point is markets are changing and we should adapt quickly.
@99Bulls@ad09@siva : In my view Viability of stock market was and is never in question but surely gone are the days when an IPO allotted share used to list at double digit multiple time valuation of issue price . I am not sure if TATA TIMKEN ipo still hold the word record for maximum ever subscription response when it oversubscribed 4017 times in 1991.
You are right, last decade or so, VC/PEs have made a lot more money than public market investors. By the time companies list, their valuations are mostly juiced out by the VC/PEs who had invested earlier. Not just in India but around the world - from facebook to netflix to companies like lal path labs etc in India where you had PEs invested. The spectacular profits that VC’s/PE made from their international investment (Facebook, Alibaba, Netflix, etc), meant that excess liquidity started pouring into Indian markets as well. Indian startups hence started raising money from these international VC/PE flush with cash.
If I had to bet my money, most of these companies will eventually list on international exchanges and not in India. Domestic investors in India don’t value companies just based on growth, they also like to see profits which is missing in most of these companies that you have mentioned.
I can rest assure you that all is fine with stock market here anyway with everything else no matter how you put it. So please do the case really. I do not really understand what is happening, VC or IPO’s will not change the main game of that .