Online broking firm Zerodha's co-founder Nithin Kamath is steering clear of the IPO rush at a time when the unicorns are lining up before the stock exchanges at rising valuations.
According to the young tech CEO, predictability is very important if a company decides to go public, something that Policybazaar CEO Yashish Dahiya agreed on during a panel discussion on the IPOs of the fintech companies at Razorpay's annual programme on Thursday.
Despite Zerodha being a big player in the trading ecosystem, there is no predictability in our business. Kamath said at Razarpay that we have both grown in revenue and profits, but our fortunes are heavily dependent on exchange traded turnover. He said that when you go public, you are under a lot of scrutiny and that you need to be predictable.
Policybazaar's CEO Dahiya agreed that business predictability and a 10 year long vision toward developing the company are some of the essential ingredients a company should have in order to launch IPOs.
Over the last 20 quarters, there was a lot of predictability in our business, which prompted us to go public, as opposed to the earlier years, Dahiya said.
Before we listed, I heard of people trying to sell shares for over 2,000 and I was furious at why the shares are being sold at higher prices, Dahiya said. He said that profitability is not a near-term goal for the company and that the approach is to grow the business with customer-centric mind.
The two tech leaders shared various investment tips for retail investors with Razorpay CEO Harshil Mathur during the programme. Dahiya made a surprising statement that he hasn't invested in any stock, mutual fund and he doesn't understand equity markets.
I don't get stock markets, so I don't invest there, Dahiya made a rather candid remark.
Kamath described the classification of cryptocurrencies as an asset class that could emerge as a risk to the equity markets because of the huge capital involved in the digital assets. Money chases money, Kamath said.