The Raingauge Index (RGI) - market cap weighted index of India’s top venture backed startups; has outpaced major indices delivering a 114 percent return since 2023 while broad market indices like NIFTY, NASDAQ, S&P, and the MidCap lag with only the MidCap index coming close at 94 percent. What gives?
Good old-fashioned earnings growth: RGI companies are delivering 36 percent median EBITDA growth, more than double that of NIFTY 50 (18 percent) and MidCap (14 percent) companies. Even more impressive is their 6 percent median EBITDA margin improvement, while NIFTY and MidCap have flatlined at 0 percent.
Continued premium revenue growth: Over the last two fiscal years, RGI companies have grown revenues by 36 percent (median) more than double than NIFTY and MidCap companies growing at ~15 percent.
New listings: New venture-backed public companies have added $8 billion in market cap to the RainGauge Index with a listing pop of 50 percent for TBO Tek, 45 percent for IXIGO, and significant gains for Awfis and Digit
Here are some key insights from the Q1 FY25 results of of India’s listed startups:
The VC-backed cohort outperformed the NASDAQ and S&P BSE MidCap as on Aug-24 by 37 percent and 20 percent, respectively
RGI Companies representing the average listed start-ups has outperformed Indian and global market indices for the 1-month, 3-month, 6-month and 1 year ended Aug-24
An average Indian listed startup trades at 1.6x its mid-cap peers – because it grows at 1.6x higher than them
From April to August 2024, 60 percent of RainGauge companies outperformed the Nifty50, 72 percent outperformed the NASDAQ, and 44 percent outpaced the MidCap Index.
Within the index, few companies grew revenues faster than 30 percent while few saw de-growth
RGI Companies continue to demonstrate EBITDA margin improvement while few saw margins declining
Price movement since listing for RGI companies
The complete report can be downloaded from: RainGauge — The Rainmaker Group
Kashyap Chanchani is the Managing Partner at The Rainmaker Group and Dhwani Mehta is his colleague. The firm advises mid-late stage private, venture-backed companies on fundraising.
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