Nearly 18 unicorns could follow Zomato’s footsteps and float IPOs. Find out more


If the stellar Rs 9,375 crore initial public offering of food delivery company Zomato left you impressed, wait for more.

A recent report by the investment banking arm of Bank of America says that as many as 18 Indian unicorns may be on their way to joining India’s IPO rush over the next 18-24 months. These 18 unicorns could raise as much as $11-12 billion thanks to the ample liquidity and the rush of retail investors, who have been driving the ongoing market rally, Gaurav Singhal, managing director of investment banking at Bank of America, told the Press Trust of India. 

Soonicorn, unicorn, decacorn

A unicorn is a startup that is valued at $1 billion or more. If a unicorn breaches the $10 billion mark, it is called a decacorn. A tech startupthat is on its way to becoming a unicorn is called a ‘soonicorn’.

How many unicorns does India have?

India has around 60 unicorns, with more than two dozen joining the list this year alone. Several reports, including one by Credit Suisse, say that the number of unicorns in India could cross the 100-mark this year, considering the amount of funding they are attracting. 

So, which unicorns could float IPOs?

At least five unicorns have already filed for IPOs. These are Paytm (Rs 16,600-crore issue), Ola (Rs 11,000 crore), Policybazaar (Rs 6,000 crore), Nykaa (Rs 4,000 crore) and Freshworks, which filed for a $100 million IPO on the Nasdaq.

Several other marquee names including Flipkart, Byju’s, and Oyo could tap the capital markets in coming years.Others on the list include Grofers, Pinelabs, Pharmeasy, Droom, and Delhivery. 
Many other tech startups that aren’t unicorns have also filed for IPOs. While CarTrade and gaming firm Nazara have already gone public, Tracxn and Mobikwik have also submitted their draft IPO documents.

Why the sudden rush?

Singhal attributes the surge in fund inflows into startups to the digital transformation that has disrupted everything in the wake of the coronavirus pandemic. He says that the pandemic-induced lockdowns have driven this rally, and that this along with the huge market potential for these companies has caught the attention of global investors.

Investors are looking for some sparks in new companies as they sit on a massive amount of capital. On top of this, India is a global growth story. Thus, lots of global funds and investors are chasing assets, he said.
But is there a significant potential for growth?

Singhal certainly thinks so. He says that in India, the internet companies do not even control 1% of the $3.4 trillion domestic equity market. In the US, the internet ecosystem dominates with 40% of the market capitalisation.