What metrics should investors use for Indian tech IPOs like Zomato?

Investors should prioritize profitability, strong unit economics, scale, and pivoting ability over mere hype.

How should investors approach the current Indian IPO market?

Be selective and disciplined. Avoid chasing immediate listing gains and focus on long-term growth and profitability.

What percentage of a portfolio should be allocated to new-age tech stocks in India?

It is recommended to limit exposure to new-age stocks to approximately 10-12% of a portfolio.

Home / Business and Economy / India's IPO Boom: Profitability Over Hype

India's IPO Boom: Profitability Over Hype

21 Nov

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Summary

Profitable companies with strong unit economics are long-term winners.
Investors should limit new-age stocks to 10-12% of their portfolio.
Avoid chasing immediate listing gains; focus on growth and profitability.

India's IPO Boom: Profitability Over Hype

India's IPO markets are experiencing a resurgence, with Gurmeet Chadha of Complete Circle Consultants emphasizing the importance of selectivity for investors. He advocates for a disciplined approach, focusing solely on profitable companies with robust unit economics rather than succumbing to market hype.

Chadha highlights that sustainable success in the new-age tech sector hinges on factors like scale, adaptability, and strong operating leverage, citing Zomato's efficient scaling as an example. While acknowledging the impressive growth of companies like Groww, he cautions investors to properly size their exposure.

He advises against chasing immediate listing gains, urging investors to apply the same fundamental metrics of growth, profitability, and visibility. Chadha stresses that discipline and careful position sizing are crucial for navigating the current investment landscape.