Public Investor’s Trust: The Leap Of Faith By Zomato And The New Era Of Startups In The Public Domain
The Indian economy has traditionally been a very welcoming environment for new businesses. The Indian customer base has embraced innovative ideas, and startups have infiltrated every aspect of our life. If you're hungry, use Zomato to get food; if you need your apartment cleaned, use UrbanClap. If you need to get to work quickly and are running late, contact an ola. #ThinkWithNiche
Aside from the fact that consumers have always welcomed these startups with open arms, these apps cater to issues ranging from how you will start your day (super meditation apps are all the rage) to how you will look (photo editing apps are really popular and have excellent ad-based revenue models). Every aspect of our lives is being covered by these startups.
Moreover, these excellent startups have paved their way to the extent that recently, Zomato launched its IPO (Initial Public Offering). IPOs is the public listing of a company when shares are available to be issued to the public in general. Simply put, IPO is when an organization starts the road from a private organization to a public one and takes money from people.
This was an important feat since a public listing leads to more responsibilities. The moment you are on the share market, your organization needs to submit all their documents to the SEBI for approval, general audits are conducted to make sure that the public’s money is not defrauded with, and since shareholders hold a place at the table now, decisions cannot be taken brashly, as concern for the investors has to be there. The company evolves from a garage operation to a conglomerate that now operates with money raised from the general public in the form of subscribed shares.
Zomato’s listing on the prominent stock markets of the country (It was listed on both NSE and BSE) was the first of its kind as this was the first time an Indian startup, decided to list on the stock market. However, with unwavering zeal from the investors, especially the general public, the 9375-crore worth listing was oversubscribed by multiple times its worth and this has created a stronghold that the Indian man is ready for this new wave of startups turning to the general public for investment.
Despite the concerns that startups require independence and public offerings severely limit innovational capacity, we need to understand that, the unending consumer support for these startups needs to translate into investor faith, for primarily two reasons. First, the common person created these startups; he needs a slice of the pie, and second, this will go a long way toward increasing trust in these startups and attracting institutional investors.
For the good news, another colossal Indian startup Paytm is planning to list by year’s end (The IPO is going to be the biggest Indian IPOs ever, and we think that this journey has just started). Now, all the money that we invested in these organizations, is going to come back to us. We just need to wait for the listings, and enjoy premium gains on subscription…..