Flipkart, Paytm, Byjus, PhonePe to Zomato, Bernstein highlights top private Internet firms that may go for IPOs in 2021 and beyond

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Some of the names highlighted in this report are the ones whose services all of us use in our day to day life – Flipkart, Paytm, Byjus, PhonePe, Zomato, Policybazaar, Delhivery, Big Basket. Bernstein says these companies may well go for IPOs in 2021 and beyond.

These companies have significant market share in their respective industry and they have thrived extremely well during tough situations in Indian market. As we have seen in the past few months, many new companies have got listed in Indian market and their IPOs were highly oversubscribed in the retail category too. Also, the majority of these IPOs did reward investors with extremely high returns which makes them all the more attractive. 

Now, retail investors can monitor these companies in internet space extremely closely as they have a humongous growth potential in India and can give excellent returns to investors. Many retail investors are not only looking at these IPOs for listing gains but also as a strong investment theme which can yield handsome returns in the next few years.


The growth in Indian E-Commerce is driven by online penetration (still very low penetration in eCommerce and life services), offline integration (internet companies turning offline as an addressable market), and traffic concentration, which is the conglomerates premium.

 The E-Commerce market is expected to grow from US $24 bn in 2018 to US $133 bn in 2025 (CAGR of 30%). Online shoppers are projected to reach 330 mn by 2025, driving online retail market growth. The increase in internet penetration, higher per capita income, broader selection, and convenient delivery are driving adoption and growth.

 Life services and Food delivery which includes food delivery, ride hailing, and online travel booking is expected to increase from US $13 bn in 2018 to US $61 bn in 2025. All three segments are duopoly markets. The food delivery market is dominated by Zomato (Alibaba) and Swiggy (backed by Naspers). Ride hailing has Ola and Uber (both funded by SoftBank).

India is an attractive market for fintech disruption driven by increasing smartphone and internet penetration, and low banking penetration. Penetration of digital C2B payments (cards, UPI, wallets) is expected to increase from 9% of GDP in 2018 to 30% of GDP in 2025. UPI payments are expected to grow at 60% CAGR driven by UPI QR payments for merchants. The card spends (debit + credit) are expected to grow at 23% CAGR. Overall share of UPI is expected to increase 50-55% of digital payments by 2025, while cards would be 40-45%.

India’s education market is expected to grow 2x from $ 63 bn in 2016 to $ 126 bn in 2022 at 12% CAGR. Spends on the K12 education market is expected at US $55Bn by 2022. Post K12 education market at US $71Bn. India EdTech user base saw a sharp spike due to Covid, total users grew 2x from 45 mn in 2019 to 90 mn in Apr 20. EdTech market is expected to grow from $0.7 bn in 2019 to $3.5 bn in 2022, growth at 60% CAGR.

The recent Bull Run in global tech stocks has prompted many of India’s tech unicorns to announce IPO plans in 2021/ 2022. Key segments like eCommerce, FinTech & EdTech have had strong growth, driven by the increase in online adoption. Leaders in these segments are gaining market share and improving unit economics.

Below is the list of companies that Bernstein has identified:

1) Flipkart – Flipkart is India’s leading ecommerce company (US $ 8.5 bn) and has 60 mn+ users in FY19. India ecommerce is expected to reach $ 130 Bn by 2025 growing at 30%+ CAGR. Walmart (has 82% stake) acquired Flipkart in 2018 at a $ 21 bn valuation.

2) Paytm – Paytm is the leading payments company, benefited from the digital adoption due to Covid. The company has 150-200 mn active users. Digital payments are at an inflection point in India with UPI based mobile payments expected to grow 60% + CAGR over next 5 years. Last round valuation of the company was at $ 16 bn. Ant Financials is the largest investor with 40% stake in the company.

3) Byjus – Byjus is the largest online education company in India. Lockdown due to Covid has provided tailwinds to EdTech with traffic for leading apps up by 300%. Byjus has 70 mn registered users. Last round valuation of the company was at $ 11 bn. Key investors are Naspers & Sequoia.

4) PhonePe – Flipkart acquired PhonePe, Payments Company in 2015. PhonePe processes annualized total payments value (TPV) of $180 bn, with 500 mn monthly transactions. The company is expected to go public by 2023.

5) Zomato – Zomato is the largest online food delivery company with over 50%+ share in India. Online food delivery market is expected to reach $ 12 bn by 2022. Zomato does 2 mn orders /day. Take rate is 22%. Unit economics are positive. Ant Financials holds 26% stake in the company.

6) Policybazaar – Policybazaar is the largest online insurance company in India with 90% market share. It does 0.4 mn transactions a month with a health commission rate of 19-20%. As per the CEO, the company will go for IPO in 2021. Softbank is the largest investor with over 15+% stake in the company.

7) Delhivery – Delhivery is the largest third-party online logistics company in India delivering 1 mn packages/day. The company has 85+ fulfillment centers and has delivered 750 mn orders till date. Large customers included Amazon, Flipkart. Last valuation for the company was at $ 1.5 bn for Delhivery.

8) Big Basket – Big Basket is India’s largest pure play online grocery company. The company has seen sharp uptick in number of orders (3x) and new customers (2x) during the lockdown. GMV (Grey market value) of Big Basket reach $ 1 bn in June, delivering 0.4 mn orders/day.

(Authored by Rahul Kamdar)

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