RBI: ‘Unicorn listings bring in new era’

With the current debut IPO choices by Indian unicorns making waves, the Reserve Bank of India has stated “a new era has clearly begun” and “another growth impulse is igniting financial markets”.
“These IPOs of new age companies arrive as bullishness about India mounts, especially around Indian tech. In fact, India’s tech boom has been long awaited, with strong global and domestic appetite for what are widely believed to be world class businesses in the pipeline,” the central financial institution stated in its “State of the Economy” report.
“2021 could well turn out to be India’s year of the IPO,” the RBI stated. “These listings coincide with a broader rush by Indian companies to tap the market and the fomo (fear of missing out) factor driving investors, which have taken the benchmark indices to records,” it stated.
However, it stated this explosion of curiosity in these firms will solely be sustained if they can convert progressive concepts into metrics similar to breaking eveann on the degree of earnings earlier than curiosity, taxes, depreciation and amortisation (EBITDA) degree with out expensing enterprise growth prices, adopted by money flows and earnings. “The jury is still out. Investors will closely scrutinise their stories,” it stated.
As per the report, markets regard them as ‘concept stocks’ as a result of they flout the present conventions — they’ve neither made earnings nor issued any steerage on ever attending to profitability. There are already warnings of systemic dangers to monetary stability that financial coverage authorities shouldn’t ignore because the unicorn IPO celebration will get going. “The bursting of the dotcom bubble in 2001 showed that many start-ups could go bust, but risk management practices have changed to diffuse this risk over many newcomers. And those that survive can go on to become the Googles, Facebooks and Amazons of the future,” it stated.