About 15-20 unicorns are likely to go public in the next 12-24 months and India will have 10-plus internet decacorns by the end of 2025, said V Jayasankar, managing director at Kotak Investment Banking.
"Equity worth $10 billion is expected to be raised from the IPO market in the next 12-24 months. Over 10 internet decacorns will emerge by 2025-end and at least two to three large conglomerates will be established," Jayasankar said in KIB’s annual media round-up.
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Jayasankar expects the internet segment to see 20 to 30 mid-to-large size mergers and acquisitions in the next one-two years. This comes after increasing interest rates and the Israel-Hamas and Russia-Ukraine wars impacted the overall merger and acquisition activity.
Funds being invested in Indian startups through the private equity and venture capital routes plummeted to about $8 billion in 2023, about a third of what came in during the previous year.
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"Funding winter will end by 2024 with the return of public market dynamism. Large internet IPOs will catalyse across-the-board deal-making," Jayasankar said.
New-age internet companies like Ola Electric, FirstCry and MobiKwik have filed draft documents with the stock market regulator and are expected to debut on the exchanges in 2024.
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A startup with a valuation of $1 billion or more but less than $10 billion is called a unicorn, while a startup with a valuation surpassing $10 billion is termed a decacorn.
India is home to 112 unicorns with a total valuation of over $350 billion. Of them, 45 startups with a total valuation of $102.30 billion became unicorns in 2021 and 22 with a total valuation of $29.20 billion turned into unicorns in 2022. In 2023, only Zepto and Incred became unicorns.
As of March 2023, India had five decacorns – BYJU’s, Swiggy, Flipkart, PhonePe and Nykaa. BYJU’s, an ed-tech platform founded by Byju Raveendran, has been struggling to raise capital, make payrolls and pay off its billion-dollar-plus debt. Recently, BlackRock cut the value of its holding in BYJU's, slashing the implied valuation to $1 billion from the $22 billion mark set in early 2022. This implies that BYJU’s is no longer a decacorn.
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On the other hand, the Indian Premier League, according to reports, saw its valuation jump 28 percent to reach $10.7 billion in 2023 from $8.4 billion in 2022, adding the cricket league to the list of decacorns.
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