Shailendra Singh, managing director of Peak XV Companions.
Lionel Ng | Bloomberg | Getty Pictures
India presents a “very favorable” surroundings for corporations to launch preliminary public choices, stated Shailendra Singh, managing director at Peak XV Companions, previously Sequoia Capital India & Southeast Asia.
“My basic view is, particularly in Indian public markets, the regulatory framework, what Securities and Change Board of India does, what Reserve Financial institution of India does, what different regulators do is definitely actually good,” Singh informed CNBC.
Singh, who has been on the VC agency for 18 years and led it since 2011, stated India has created “a really favorable surroundings” for corporations to listing there. “It is each protected and dynamic in India for a younger firm to have the ability to go public.”
There have been 220 IPOs in India final yr, up 48% from 2022, making it the second-largest IPO market on this planet, based on an EY report. Although Mainland China took the highest spot, the variety of IPOs there slid 29% to 302.
The Indian IPO market is about to stay robust in 2024, buoyed by optimistic investor sentiment, a strong economic system, and expectations of decrease inflation and price cuts, EY stated.
“The Indian capital markets have advanced fairly a bit. The markets have deepened when it comes to liquidity. There’s plenty of curiosity in tech corporations arising as a result of … we’re starting to see a lot of corporations with triple-digit million revenues and earnings,” Singh stated.
India is rising as a brilliant spot amid international macroeconomic uncertainty, primarily pushed by optimism over the nation’s resilient financial fundamentals, KPMG stated final month in its report “IPOs in India.”
On why some Indian corporations choose to listing regionally, Singh stated: “Founders are realizing that the U.S. markets might not at all times perceive Indian corporations.”
As many as 20 corporations together with Zomato and Mamaearth in Peak XV’s portfolio have listed through IPOs, the agency stated. Peak XV Companions, certainly one of Asia’s largest tech buyers, manages $9 billion in belongings.
In June, Sequoia divided its international partnership into three impartial items, specifically Sequoia Capital in the U.S. and Europe, Peak XV Companions in India and Southeast Asia and HongShan in China.
The enterprise capital agency has invested in additional than 400 corporations throughout the expertise, software program, monetary companies and shopper sectors together with India’s fintech agency Pine Labs, Indonesian espresso chain Kopi Kenangan, Singapore-based on-line market Carousell and edtech corporations Byju’s and Unacademy.
Favourite sectors in India
India has a number of “fairly thrilling” funding areas, Singh stated, naming cross-border software program, fintech and shopper because the agency’s greatest sectors for investments.
Cross-border software program is a key space Peak XV is betting on, given the potential of software program corporations being inbuilt India for the entire world, he stated.
“Our second-[biggest] sector tends to be fintech. We’re a really robust fintech investor. I believe India is among the world’s most fertile markets due to Aadhaar, UPI and the India stack.”
Within the consumer-centric sector, he listed shopper manufacturers, ed-tech and healthcare because the the agency’s focus for investments.
“We are going to see loads of good schooling corporations being constructed within the long-term,” Singh stated, given that customers in locations like India and China perceive that the trail to upward social mobility is thru schooling.
There are additionally rising areas equivalent to deep tech and semiconductors, that are attention-grabbing although it is nonetheless early days, he stated. “We’re [just] beginning to make bets.”
