Rajesh Gopinathan, CEO, TCS
Rajesh Gopinathan, the CEO of TCS, one of the world's most-valued IT companies, welcomed the upcoming Internet IPO rush in India, stating that high-risk capital is very good news and a sign of maturity of the Indian capital market.
"I think it is overall very good and a sign of maturity of the capital market that money is being put at a risk basis. The real strength of the US is that risk capital is available in sufficient quantity," he said, in response to a question from Moneycontrol. He was speaking after TCS' earnings for the first quarter.
Gopinathan further said that while this is high-risk capital, the fact that it is available is very good news as it will feed innovative capacity in the ecosystem, leading to a significant positive impact.
"Personally I don't understand many of those valuation parameters but finance is an empirical science at the end of the day so whatever is happening that sets the theory going forward. So it is a step in the right direction," he said.
While TCS is the second-most valued company in India by market cap after Reliance Industries, it is also one of the most valued information technology companies in the world. It raced past Accenture on a couple of occasions to become the most valued IT company globally by market capitalization. As of July 9th, 2021, it had a market cap of 11.87 lakh crore.
Gopinathan's comments come against the backdrop of food delivery platform Zomato's IPO, which is set to open next week, making it the first Internet unicorn to list in India. Apart from Zomato, Paytm, Policybazaar, Mobikwik, Nykaa, and Delhivery are also firming up plans for a public listing in India, even as there is buzz of Flipkart and Freshworks listing in the US.
When asked if TCS will look to acquire startups, Gopinathan said, "We will engage with the startup ecosystem but we don't have the enthusiasm to set up a private equity fund or get into investment."
One way TCS partners with startups is through its COIN or Co-Innovation Network, which it launched in 2006. TCS uses COIN to bring together experts from start-ups, research, academics, and the corporate world to work on innovations for its Fortune 1000 clients. The program has an accelerator, reference architecture, start-up partner program, and an Integration team.
While TCS is steering clear of direct investments, its parent Tata Sons has huge ambitions for the e-commerce space, which is currently dominated by Amazon, Walmart-owned Flipkart, with Reliance Industries also expanding aggressively through JioMart.
It is building a super app under Tata Digital, with plans to add categories such as groceries, health, education, entertainment, electronics, fashion, travel, beauty and lifestyle. It also plans to leverage the strength of group companies such as Titan, Voltas, Trent, Tata Consumer Products, Tata Motors, Vistara, Tata AIG, Tata Capital and Taj Hotels, offering users an array of services in one app. While it acquired a majority stake in BigBasket and 1MG, it also invested in CureFit.