India Tech IPO juggernaut — $50 Billion in the bag, $200 Billion to go (2021–22)

Manish Kheterpal
Published in
8 min readNov 17, 2021


#WaterBridgeVentures #IPO #Tech #Digital #IndiaIPOFrenzy #VC

India bull market

$250–300 Billion of market cap being created in the 18 months since H2 2021 from Tech + Digital in India

WaterBridge Ventures Manager commentary (Nov 2021)

JAS (July — August — September) quarter opened with mixed emotions vis-à-vis CoVID losses from the 2nd wave (India witnessed the worst phase in the previous quarter) and remarkable fiscal quarterly growth in GDP (20%) of the country. The quarter ended with 11% growth of the broader stock market indices and overall positive sentiment around growth in the economy. The backdrop of divergence between the general economy and the Tech economy continued to capture headlines. Indian startups have raised over $26.5 Billion in the first 3 quarters of 2021 which is more than 2x of the $11 Billion raised in all of last year (2020). Similarly, more than double the no. of new unicorns (28) were created in the first 9 months of the year compared to 11 unicorns we saw throughout 2020.


2020 India Unicorns

INDIAN UNICORNS (first 9 months of 2021)

2021 India Unicorns (Jan — Sep: 9 months)

The sharpest excitement vector though during this quarter continued to be the unshackling of India Tech on the bourses. Zomato (#FoodTech) debuted on Indian stock exchanges in July with a big bang $1.3 Billion offer, and the stock has traded up 110% to reach a market cap of $17 Billion (crossing the symbolic INR 1 lakh crore mark several times since listing). This was a watershed event underlining the scarcity of Tech economy IPO’s in India (since the advent of IT and IT enabled services biggies from India in the previous decade) and it is not surprising that the IPO was oversubscribed 38x. Zomato’s market cap is now ahead of the global market leader comp GrubHub ($15 Billion) even though the latter’s revenue of $1.8 Billion is 5x Zomato’s revenue.

Followed by Zomato’s big bang IPO, beauty omnichannel retailer Nykaa (#eCommerce) debuted on the National Stock Exchange (NSE) with an even more flare. Nykaa’s $700 Million IPO was oversubscribed 82x and was already trading up 100% ($15 Billion market cap) from its IPO price in less than a week of its listing. Soon after PolicyBazaar (#InsuranceTech) IPO of $750 Million was oversubscribed 17x with a day 1 listing premium of 23% landing in the $7 Billion market cap zone. Scarcity and demand of new economy stocks in the Indian listed markets has been seen across retail as well as institutional investors.

Zomato, Nykaa and PolicyBazaar are not alone to participate in this frenzy with many more already having filed with the regulator SEBI for IPO’s planned over the next couple of months — PayTm (#FinTech) IPO size of $2.5 Billion, CarTrade (#MobilityTech) at $300 Million, Mobikwik (#DigitalPayments) at $250 Million, and Ixigo (#TravelTech) at $200 Million to count a few from a long list.

We believe with the imminent listings of some of these companies and a lot more preparing to join the bandwagon, IndiaTech is well poised to add $250–300 Billion of additional market cap over the next 36 months (including some of the companies like Flipkart that are expected to list outside India).

While 2020 was the biggest year for mega Tech IPO’s in the US (Airbnb, DoorDash, McAfee, Palantir, Snowflake, ZoomInfo and many more) and a record year of Tech listings through SPAC’s ($80 Billion raised in 2020), we believe H2 ‘2021 and 2022 will mark the biggest years for India Tech listings.

All of this doesn’t come as a surprise to us as we believe this has been building up over the last decade and now its culminating with showtime. We track the penetration of digital in various sectors of the Indian economy and the following data shows us that ‘Digital has massive headroom to grow across various sectors of the Indian economy’ and that we will witness 10x growth in the current decade as digital becomes pervasive in the lives of the Indian consumer and penetrates deeper within Indian enterprises and SMBs.

The divergence between tailwind (Education, Health, SaaS, Food delivery et al) and headwind sectors (Travel, non Tech Financial services, Manufacturing, Real-estate et al) continues to get starker. Following captures our thoughts on how Tech/Digital penetration increase is being led in markets like the US which India is heavily inspired from, along with a special emphasis on the new frontier of growth in India (i.e.Bharat) where WaterBridge Ventures has been bullish since the beginning of our franchise. Simultaneously China announced a massive crackdown on Tech (EdTech, FoodTech, companies like Tencent, Alibaba and Didi Chuxing) eroding almost $700 Billion of market cap in the first 2 weeks, a move that has left most of the pundits confused (on the government’s real intentions) but certainly something that’s bound to redirect more global capital to open markets like India — (Investors pivot to India after the China crackdown):

NASDAQ is up 130% (compared to 104% for S&P 500) between March 2020 (start of the global pandemic) and now showing overall market excitement with an over-indexing of Tech. Exuberance in Tech was also seen with growth in market cap of Tech leaders like Tesla (900%), Alphabet-Google (157%), Apple (135%), Microsoft (113%), Amazon (80%), and opportune stocks like Zoom (90%) since the lows of March 2020. New Tech listings like Airbnb and DoorDash saw massive pops within weeks of their IPO while SaaS stocks soared to median multiples of over 20x (EV/Revenue)

Around the world, consumer behaviour change of several years has been brought about over the last 6 quarters towards adoption of Tech in the life of an average consumer. Acceleration in adoption of Tech for sectors like Education, Healthcare, Gaming, Internet Commerce has been even more phenomenal in low Tech penetration markets like India. Enterprise adoption of work collaboration, remote working and consequentially DevOps SaaS , software products has seen expedition in a short period of time. This means good news as we invest behind Tech disruption in select B2C & B2B sectors with a thesis driven approach

Rub-off positive sentiment of the $20 Billion funding in Jio Platforms from strategic (Facebook, Google, Intel, Qualcomm) and financial investors (Silver Lake, KKR, Vista, GA, Mubadala, ADIA, Saudi Arabia Sovereign, TPG, and Catterton) at the peak of CoVID continues to play out in India. Digital consumption is expected to scale new heights as digital assets are expected to scale faster over the next few yrs. in India. $26.5 Billion of funding in private Tech markets just in the first 9 months of 2021 have further underlined this trend

Sectors like FinTech (BharatPe, Digit Insurance, Open, OfBusiness, and PineLabs’ fund raises), Social, Assisted Commerce and Consumer (Cars24, Meesho, Lenskart, ShareChat’s significant capital raises, aside from Flipkart’s largest ever fund raise of Series J $3.6 Billion), EdTech (Byju’s, Eruditus, UpGrad further fund raises and Byju’s continued M&A spree with Great Learning), and FoodTech (Swiggy’s mega fund raise around the Zomato IPO) saw maximum activity

Strategic interest in the Tech/Digital space had some pivotal moments with Tata group building its Digital practice by integrating ePharmacy player 1mg along with its BigBasket and Cure.Fit investments in the previous quarter. This is in addition to Jio’s acquisition of JustDial (B2B directory listed business for $470 Million) which now clearly positions 2 Indian conglomerates going after new economy assets. While Prosus backed PayU acquired payment gateway BillDesk in an all-cash transaction of $4.7 Billion, India Inc witnessed a landmark event when a new age Tech company (PharmEasy) acquired a brick-and-mortar diagnostics business Thyrocare for over $600 Million

India VC deals by stage — last 6 quarters

While Seed, Series A deals peaked (indicating healthy new venture formation activity) in the JAS quarter, Series C+ deals continued to steal the show underlining concentration of capital towards category leaders especially in the post CoVID business models of success

One of the themes we have been bullish on since the inception of WaterBridge Ventures is Bharat where adoption of Digital has been swift and beyond anyone’s expectations. The following shows how Bharat customers are not only consuming free content, social media but also beginning to make significant contributions to transacting customers (and revenue pools) across various Digital categories of consumption. Several of our portfolio companies Bijnis, Chalo, CityMall, CuriousJr, DoubtNut, EloElo Medcords, OneCode, YellowMetal and ZipLoan are targeting consumers in Bharat in addition to having founding teams that are specifically experienced to build game changing companies focused on this TG

Metro: Top 8 cities; Tier-1: Population of 1–5M (54 cities); Tier 2+ clusters: Population < 1M

We have no doubt that Tech economy would contribute $750 Billion — $1 Trillion to India’s GDP by 2030 and therefore investment positions to back the Tech leaders of tomorrow should be made now to participate in this massive value creation

Consequently, we have all the reason to be optimistic about India VC asset class. Some of the trends we expect in the next 12 months:

Continued interest from global strategic capital chasing India Tech, Digital themes (Investors pivot to India after the China crackdown)

Continued accelerated consumer adoption and subsequent funding in tailwind sectors like Education, HealthCare, Content, Gaming Work Collaboration, Software & SaaS among others

Capital consolidation to leaders in each sector

Massive pickup in India VC asset class funding while our focus area of early stage funding entry (Seed — Series A) will continue to see good quality and reasonable volume of deals and new business formation

IPO’s and increasing M&A activity in #IndiaDigital will continue to fuel the excitement in our space

$50 Billion in the bag (Zomato, Nykaa, PolicyBazaar), $200 Billion (PayTm, et al) to go..