GUEST POST by Vedant Goel
With the ever increasing number of Covid-19 cases in India, the economy is facing major mayhem, thereby resulting in a slowdown. It is vividly visible how the public markets are volatile, with huge swings every day. Nonetheless, some startups in a few sectors have also had a good incline in their business prospects.
Are you one of those using Zoom for daily conferences and meetings? Or are you playing Pictionary on gaming apps like Houseparty? You might definitely be watching something on Netflix or Amazon Prime. If yes, you are already part of this trend!
During the same period, the Software as a Service (SaaS) video conferencing company, Zoom, has seen tremendous growth in its market capital by the rate of 77%. Not only Zoom, but the targets of Gaming apps such as Psych and Houseparty have also seen a spike in their customer base. The major streaming applications like Netflix, Amazon Prime, etc. and online education content providers like Byju’s, and Khan Academy have also reported a considerable boost in users with the total time spent by individuals on their platforms. This pandemic has profited online entertainment and communication startups. However, do you know if investing in these startups is a good idea right now? An expert from Initial Public Offering Corner, suggests “It is a very crucial time for investors to understand the future of companies listed in the IPOs before making a stock investment. The current market scenario being turbulent, one needs to assess all the conditions through in depth research and prediction to gain fruitful results (sic.)” With a team of devoted and passionate stock market enthusiasts who have great expertise in IPO research, IPO Corner is one such platform that assists investors and educates them about the latest IPO Listings.
The startups from the travel industries which provide flight and hotel bookings have seen a major downfall. The eminent gig-economy travel startups like Uber, Ola, and Airbnb have seen an extensive drop in demand. Airbnb also had planned to file for an IPO in 2020, which seemingly has been postponed due to the huge impact of Covid-19 on the travel industry. SoftBank backed insurance aggregator Policy Bazaar and the Indian ride hailing app Ola, which planned to go public in 9 to18 months, may indefinitely defer those plans due to the current turbulent market scenario.
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As per data compiled by Bloomberg, India’s stock exchanges have stooped down by 25%, and eight companies listed in India raised just $7.3 million, a five year low. Fundraising has become a serious challenge for many businessmen and startup companies. Looking for the next round of investment has become arduous for leading startups. IPO researchers state that “IPO window” (good market conditions for going public) is unpredictable and the investors must wait until the market stability returns. In India, the recent amendments made to the Companies Act in March 2020, will allow Indian companies to directly list on specific foreign stock exchanges. This will ensure easier access to diversified pools of capital, better valuations, a broader investor base and in turn, boost India’s brand globally. This is a splendid opportunity for Indian startups to look forward.
The whole COVID-19 situation has taken a toll on the world and has led to terrible market turbulence. The volatility of the market caused by the impact of coronavirus has made all startups and enthusiasts go under a wrap, be it in regards to valuation or critical timing.
Researchers at IPO Corner explain the two major challenges the IPO market is facing and first being high market volatility, which makes it almost impossible to price IPOs in the listings. Secondly, investors will be held back if the market witnesses weak performance over the next quarter. The future months might see many mergers and acquisitions if this environment continues.
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Many Indian startups that are profiting from the lockdown are from e-commerce and online retail websites. As the consumers are stocking up on the essentials, the major grocery retailers like Bigbasket and Grofers are facing a supply crunch and struggling to keep up. However, they are committed to sticking to honest prices when the market prices are skyrocketing. The air of uncertainty surrounding the investment market is equally the same in India as in the global world. “In times like this, one must educate oneself on the future market trends and look out to grab the next best opportunity to score wealth.” says an expert from IPO Corner.