The “League” of Indian unicorns ranks third in the world, just after China and the United States. The common factor? The reference area: the technological one. We talk about it with the experts of UTI International
Expansion of budgets and improvement in profits, together with a fertile economy in the number of unicorns, reaching a total of 50, 16 of which were born in 2021. According to Venture Intelligence data , the ‘ League ‘ of Indian unicorns now has a higher rating to 180 billion dollars, ranking third on a global scale, after China and the United States. The common factor? The reference area: the technological and innovation one .
As explained by Praveen Jagwani , Chief executive officer (CEO) of UTI International , “Indian companies are experiencing an important phase of consolidation, with financial statements in strengthening and profits in improvement “. A trend that is “most visible in sectors such as electronics and pharmaceuticals, where supply chains are migrating to India”, in part by moving away from China and creating long-term jobs.
The technology sector, together with the pharmaceutical sector, together account for about 25% of the UTI India Dynamic Equity Fund .
The government’s decisions to offer its support “through favorable political measures, such as the reduction of corporate tax rates, labor reforms and incentives linked to production”, also contribute to the positivity of the Indian entrepreneurial fabric.
The empty field left by China and the Indian unicorns
While the Chinese market is therefore grappling with a major crackdown on the part of the government, which seeks to limit the superpower of local technology leaders, from e-commerce (with the sanction to Alibaba), to digital payment (with the blocking of the IPO of the Ant financial institution), to sharing (with the removal of Didi from the app stores), to private tutoring, India is engaged in a double process : on the one hand, that of consolidation and economic growth, with an imprinting to innovation; on the other hand, to create new generation unicorns.
Earlier this month, Zomato, a food delivery app, became the first Indian unicorn to go public, raising $ 1.3 billion in the Initial Public Offering (IPO), ”comments Jagwani. The online retailer, Flipkart, recently raised $ 3.6 billion from the market, with a business valued at $ 38 billion; and again, Paytm, a digital payment company, is awaiting listing by the end of the year, with an IPO of $ 2.2 billion ”.
These unicorns, a term by which we mean private startups valued at over a billion dollars, are mainly financed by international capitals which seek to exploit the purchasing power of those 625 million Indian Internet users, who right now approach the world of video streaming, social networks and e-commerce. Considering a population of 1.3 billion, the market now has ample room for growth.
Startups and technology, a question of numbers and regulation
“The Indian population is expected to surpass that of China over the course of this decade, an opportunity that many do not want to miss,” continues the CEO of UTI. India is the latest among the new countries to offer sustainable growth opportunities on a large scale , thanks to improved revenues and digital infrastructures. A market that could soon attract the capital of those who, with China, got burned. For its part, Delhi also has to deal with a Narendra Modi government that is severe towards foreign companies (especially social giants and streaming companies), as well as with a more stringent treatment of users’ personal data.
“The recovery in global and domestic demand has led to the utilization of Indian production capacity to reach 67%, compared to the minimum of 47% in June 2020. New investment projects and private flows have returned to growth , particularly in the manufacturing sector , suggesting a gradual restart of the long-awaited investment cycle ”adds the CEO of Uti.
by Gloria Grigolon
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