Shailendra Singh, Managing Director, Peak XV Partners.
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Shailendra Singh, managing director of Peak XV Partners (formerly Sequoia Capital India and Southeast Asia), said India provides a “very conducive” environment for corporate IPOs.
“My overall view is that, especially in the Indian public markets, the regulatory framework, the Securities and Exchange Board of India, the Reserve Bank of India and other regulators are actually doing very well,” Singh told CNBC.
Singh, who has been with the venture capital firm for 18 years and has led the company since 2011, said India has created a “very conducive environment” for the company to list there. “For a young company, listing in India is both safe and dynamic.”
India had a total of 220 IPO transactions last year, an increase of 48% from 2022, making it the second largest IPO market in the world. Ernst & Young Report. Although mainland China topped the list, the number of IPOs fell 29% to 302.
Indian IPO market Will remain strong in 2024Ernst & Young said it was boosted by upbeat investor sentiment, a strong economy and expectations of falling inflation and interest rate cuts.
“Indian capital markets have evolved a lot. The market has deepened in terms of liquidity. There has been a lot of interest in technology companies because… we are starting to see a large number of companies with triple-digit revenues. , and profit,” Singh said.
India is emerging as a bright spot amid global macroeconomic uncertainty, largely due to optimism about the resilience of the country’s economic fundamentals, KPMG said last month In its report “Initial Public Offerings in India”.
On why some Indian companies prefer to list locally, Singh said: “Founders realize that the US market may not always understand Indian companies.”
The company said that as many as 20 companies in the Peak XV 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 partners into three separate units, namely Sequoia Capital in the United States and Europe, Peak XV Partners in India and Southeast Asia, and Hongshan in China.
The venture capital firm has invested in more than 400 companies in the technology, software, financial services and consumer sectors, including Indian fintech company Pine Labs, Indonesian coffee chain Kopi Kenangan, Singaporean online marketplace Carousell and education technology companies Byju’s and Unacademy.
India’s favorite industry
Singh said there are several “pretty exciting” investment areas in India, naming cross-border software, fintech and consumers as the company’s biggest investment areas.
He said cross-border software is a key area that Peak XV is betting on, given the potential for software companies established in India to serve the world.
“Our second (biggest) industry tends to be fintech. We are very strong fintech investors. I think India is one of the richest markets in the world because of Aadhaar, UPI and India Stack.”
In consumer-focused areas, he listed consumer brands, education technology and healthcare as the company’s investment priorities.
“In the long run, we will see a lot of great education companies being born,” Singh said, because consumers in places like India and China understand that the path to upward social mobility is through education.
There are also emerging areas, such as deep tech and semiconductors, that are interesting although still in their early stages, he said. “We (just) started placing bets.”
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