Shailendra Singh, managing director at Peak XV Partners (formerly Sequoia Capital India & Southeast Asia), said India offers a “very favorable” environment for companies to launch initial public offerings. Stated.
“My general view is that the regulatory framework, particularly in India’s public markets, what the Securities and Exchange Board of India is doing, what the Reserve Bank of India is doing, what other regulators are doing,” Singh told CNBC. That’s actually very good.”
Singh, who has been with the company for 18 years and has led it since 2011, said India has created a “very favorable environment” for companies to go public. “It is safe and dynamic for young companies to go public in India.”
According to a study, there were 220 IPOs in India last year, an increase of 48% from 2022, making it the second largest IPO market in the world. EY report. Although mainland China took the top spot, the number of IPOs in the country fell by 29% to 302.
The Indian IPO market is Expected to remain strong in 2024EY said it was supported by optimistic investor sentiment, a strong economy, and expectations for lower inflation and interest rate cuts.
“The Indian capital market has evolved considerably. The market has deepened in terms of liquidity. Interest in emerging high-tech companies is increasing, as large numbers of companies with multi-million dollar revenues and profits are starting to emerge. body,” Singh said.
India is emerging as a bright spot amid global macroeconomic uncertainty, largely due to optimism over the country’s resilient economic fundamentals. KPMG said last month: In the report “IPOs in India”.
As for why some Indian companies prefer local listings, Singh said, “Founders realize that the U.S. market doesn’t necessarily understand Indian companies.”
According to the company, as many as 20 companies in Peak XV’s portfolio, including Zomato and Mamaearth, have gone public through IPOs. Peak XV Partners is one of Asia’s largest technology investors, with $9 billion in assets under management.
In June, Sequoia split its global partnership into three separate divisions: Sequoia Capital in the U.S. and Europe, Peak XV Partners in India and Southeast Asia, and Hongshan in China.
The venture capital firm has a portfolio of technology, software and financial services companies including Indian fintech company Pine Labs, Indonesian coffee chain Kopi Kenangan, Singapore-based online marketplace Carousel, and edtech companies Bjuz and Unacademy. , has invested in more than 400 companies across the consumer sector.
Favorite field in India
Singh said India has several “very exciting” investment areas, citing cross-border software, fintech and consumer as the company’s biggest investment areas.
He said cross-border software is a key area in which Peak XV is betting, given the potential for software companies to be set up in India for the entire world.
“Our second-[biggest] The sector tends to be fintech. We are very strong fintech investors. I think India is one of the most fertile markets in the world because of Aadhaar, UPI and India stack. ”
In consumer-centric sectors, he cited consumer brands, edtech and healthcare as the focus of the company’s investments.
Consumers in countries like India and China understand that the path to social mobility is through education, so “a lot of great education companies will be built in the long run,” Singh said. said.
There are also emerging fields such as deep technology and semiconductors, which are still in their early stages but are interesting, he said. “we [just] I’m starting to bet. ”