Indian unicorns to provide wealth creation opportunities: Morgan Stanley
“These unicorns are likely to go public over the next three to five years creating a strong pipeline for investors to make healthy returns,” said Kamal Yadav, co-head of investment banking in India at Morgan Stanley. Yadav, along with his colleague Samarth Jagnani, head-global capital markets, India- Morgan Stanley, were speaking at a session on wave of tech IPOs at the India Internet Day event being organised by TiE Delhi.
Calling India one of the most attractive markets for the global investor community, Yadav and Jagnani pointed out that the frenzied deal making is a sign of a maturing market. “In the last 12 months, almost $30 billion worth of investments have flowed in, which is almost 1% of the current GDP (considering India’s GDP stands at $3 trillion). This is likely to increase many times over,” Jagnani said adding that, “India is an opportunity, investors cannot ignore”.
India continues to be the best performing emerging market both in rupee as well as dollar terms. With the IPO market maturing and overall ‘reduced negatives’ are attracting global pools of capital, they said
So far this year, companies such as Zomato, CarTrade among others have generated $10 billion worth of IPO volume and the year is likely to close with another $20 billion of volume if companies such as Nykaa, Paytm and Policybazaar that have filed their draft prospectus with the market’s regulator, go on the floor, Jagnani says. “Last time we saw such high deal volumes was back in 2007,” Jagnani told ET is a post-event call.
Not only has the equity capital markets deepened, the overall capital markets, including issuance of debt issuance has also seen an uptick. “We will see more sophistication going forward with bond, derivatives and other markets also deepening here,” Jagnani said.
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Not only has the market matured with a bouquet of investment opportunities available, the pools of capital have also widened. “There are crossover tech funds, marquee global investors who are lining up to tap into the India opportunity. Even the domestic capital is competing to have a meaningful share of deals across early, growth and late stages,” Yadav said.
“Besides, when these companies list, there is going to be a massive wealth generation opportunity for employees of these companies, who would channel back the money into the market either through entrepreneurship or investing in the markets,” Jagnani said.