Unicorn IPOs: Examining the Challenges and Opportunities

Unlocking Success: Navigating Challenges and Opportunities in Unicorn IPOs

India is witnessing a rise in unicorn startups or private companies worth over ₹8,600 crore, disrupting industries and attracting global investors. By 2022, India has added 14 new unicorns, taking the total to 100 and ranking third in the world behind the US and after China. However, unlike their counterparts in other countries, most of these dogs have not yet gone public, preferring private funding.

This article examines the reasons for this trend, the challenges and opportunities for Indian unicorns to go public, and the impact of their IPOs on the Indian economy and society.

Challenges and Opportunities for Unicorn IPOs

Despite their reluctance, some Indian dogs are poised to go public shortly, driven by a variety of factors. One of them is market opportunity and demand for their products and services. India has a growing consumer base, with over 130 million people, 70 million internet users, and 45 million smartphone users. Growth in domestic demand, Indian demographics encouraging start-ups, presence of strong start-ups.

The ecosystem, the government's 'Startup India' initiatives, and increasing the number of stakeholders, willing to spend private money on commitments have led to investors with 'winning take all' the mind has seen.

The biggest challenge facing Indian unicorns is attracting the right investors with similar expectations when it comes to growth and exit strategy. There is now a mad rush of global capital looking for successful projects but the tables could turn in the face of recession and geopolitical conditions.

Many of these global investors want speed and are looking for a fast-rising unicorn. This leads to rapid capital expenditure in pursuit of market share. Another major problem is the reliability of market prices for these clients. Private companies profit from undisclosure and lack of participation contributes to price distortion. The irrational growth of investors and entrepreneurs also drives up prices.

Neither practical business models nor future projections would justify this valuation. It is therefore important for unicorns to demonstrate long-term traceability and not simply fall into the ‘paper’ category. unicorns depend on optimistic individual markets. Poorly polled Unicorns have to face harsh reality when they come onto the public list. The Business Times Research Bureau reports that investors lost 9%.71% of their wealth by investing in such companies as Paytm, PolicyBazaar, and Zomato.

Conclusion: India is the fifth largest economy and has become a force reconnecting with the global economy. It has developed robust business models, strengthened security infrastructure and digital expansion engaged in formal relations with other countries in the interest of nation-building on a transaction/reward-based basis.