Several Founders, Co-Founders, CXO Bankers, CXO Fintech professionals & people who participated in the ePanel discussions:

  • Mr. Yogesh Gupta, Former Head Online Remittances- Money2India International Banking Group, ICICI Bank
  • Mr. Sivakumar Krishnan, CTO, Rural Mandi Fintech Pvt Ltd
  • Mr. Vinod Shah, CIO/GM(IT), Scheduled Apex Bank
  • Mr. Abhishek Arun, former Chief Operating Officer, Paytm Payments Bank
  • Mr. Jolly Zachariah, Head of Channels at Ujjivan Small Finance Bank Limited
  • Mr. Ravi Joshi, Product Head Debit Card, Prepaid Cards and Marketing, IDBI Bank
  • Mr. Taron Mohan, Owner, NextGen Telesolutions Pvt Ltd
  • Mr. Raghu Veer Dendukuri, Founder, Ideal Nation, and Solution Architect at Invincible Tech Systems Inc.
  • Mr. Sharad Goklani, former President and CTO at AU Small Finance Bank
  • Mr. Vikas R Panditrao, Investor, Start-ups
  • Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

Here’s a strange phenomenon pointed out by the community regarding IPOs: A profitable bank’s IPO got oversubscribed by 1.94 multiple on the IPO size. While fintech companies are loss-making all of them get an IPO subscription in a multiple of 50+ their IPO size. Well, does this hint at something for the future?

To begin with;

  • It’s a matter of concern given consumers are investing in companies or things that they don’t understand and big guys are taking exits. People are just speculating without much logical analysis. As rightly said, once the bubble starts bursting, most will collapse.

Well, everything is perception driven;

  • While the formula is to earn profit end of the day, these days, people tend to invest in marketable possibilities, considering the multiple X returns, with huge risk appetite (calling that a calculated risk), and most of the initiations happened in the lines of creating a market (example: Paytm, PhonePe, Google Pay, etc invested more in creating the digital habit in the name of cashback, and other rewards to the customer, who knows they are getting more during a timeline, with the hope they add more users while few take full advantage of rewards) and in reaching the last mile. Once the route is established, we will have many players competing for the unveiled pie.
  • Member opines, “People are betting on consumption as theme and idea. In banking, it’s too crowded. Though objectives are different short-term gains. I don’t think at these valuations people are looking for long-term”
  • Here companies look for valuation based on future business volumes. Their business model is to generate more income albeit at a loss and try to project higher volumes in the future. Their valuations are ‘x’ times their revenues. In the case of banks, people look at their profitability, and hence the subscription levels are lower compared to fintech companies. Only when a few tech companies go down will this mindset change.
  • It is pure marketing, where fundamentals don’t matter. Big fund houses, FIIs, venture capitalists, PE, and Angel investors who have invested in the story manage to come out with X-multiples on their investment during IPO. Retail investors who fall for the long-term story, pay the price!

Shouldn’t the regulator enforce that a company coming out with an IPO shows consistent profit over the last 3 years? Register & Read the complete discussions 

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