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Technology start-ups on the stock market


The Indian stock market has hosted a record number of new age companies that have headed for IPOs this year. The rapid growth of tech startups coupled with SEBI’s relaxed standards on the startup list and the COVID-19 pandemic have driven this digital momentum.

According to StartupIndia, there were over 50,000 startups in India in 2018, of which around 9,300 were tech-driven startups. In 2019, 1,300 new tech startups were added to the ecosystem, indicating that two to three tech startups are created on average every day.

The disruption by these new age startups has been more visible over the past 12-18 months as businesses and households have gone digital during the pandemic. Over the past few months we have seen Zomato, Nykaa, and PB Fintech, among others listed on the market and receive mixed reactions on their performance.

To understand this trend, YourStory’s Daily Dispatch organized a roundtable with Prashant Pitti, co-founder and executive director, EaseMyTrip; and Sandeep Aggarwal, Founder and CEO, bedroom.

The course of the IPO

EaseMyTrip online travel booking platform listed on the stock exchange earlier this year. The company has claimed to be profitable since its inception and claims to have never raised funds from outside sources in the past 13 years.

Commenting on the course of the IPO, Prashant Pitti, co-founder and executive director of EaseMyTrip, said: “We have been preparing for a year and a half to be listed. We started in the middle of 2018, then Covid came along. ”

The Mumbai-based company was slated to go public in March 2020, but with the COVID-19 outbreak in February 2020, the process has been postponed until 2021. Prashant talks about the responsibility of being a public company which includes quarterly reporting and shareholder meetings.

“It’s all worth it. Just the feeling that you have hundreds and thousands of people who are your shareholder and who work as a larger group, ”he adds.

While EaseMyTrip began its journey earlier this year, automotive e-commerce marketplace Droom Technology recently filed its draft red herring prospectus (DRHP) with market regulator SEBI. The startup is looking to raise up to Rs 3,000 crore from an initial public offering (IPO).

The viewfinder

Sandeep highlights the logic behind the IPO. “If you take a long-term approach and build a business or a product that is designed to last, I think the IPO is definitely a big step,” he says, on the trend for internet companies to go. towards IPOs.

As it concerns Payment, he says the stock market is extremely volatile and that evaluating the performance of the fintech giant would be a short-term horizon.

Echoing the same thought, Prashant adds that new age businesses are very nimble. A decade, he says, is a very long time during which the business can change drastically. He believes it will take some time for the market to understand tech-driven companies and figure out how to respond to them.

“Companies like us, new age companies – we are disrupting, we are doing something better faster than the way it was traditionally done,” Sandeep adds.

Droom Technology has registered its DRHP with SEBI on November 12. The Gurugram-based company has yet to disclose a launch date for its offering.

EaseMyTrip has fleshed out an acquisition strategy to buy out companies like its category. The brand recently acquired Spree Hospitality after its first acquisition of the B2B travel platform Traviate.