Make My Trip (MMYT) IPOed yesterday on the NASDAQ, and posted the biggest first-day gain for a U.S. initial public offering since 2007. It is valued at over $900 M, and more than 9 X forward revenues. By comparision, Naukri is valued at $ 750 M. MMYT also happens to be just the 4th Indian company to list in the US while there are 200+ Chinese companies listed on US exchanges, and at least 14 Chinese companies went public in the US in 2010 alone.
Back to my question. Is MMYT a Flash in the Pan or the Harbinger of the Future? I happen to believe its the latter, and over the next decade, 10s of Indian internet and technology companies will list on US exchanges.
- The internet in India is taking off and while there is unlikely to be an Indian Baidu (because English is so widely spoken), there could well be an Indian Tencent or Shanda or Amazon or Zappos or….
- Venture capital has been around in China since the early 90s while venture funded companies were as rare as the Indian snow leopard till a few years ago
- The biggest change in India in the last 5 years (IMO) is the change in scale of ambition. To illustrate the point, let me share a story. I recently met a college classmate who is now a very successful investment banker after more than a decade. Over a drink, I asked him what his goal was, and without batting an eyelid, he said, “I plan to make $ 100M in this gig“. I almost fell off my chair!
- Till recently, the Indian economy was both too small and growing too slowly to create global scale companies. In 2000, China’s GDP was just over $ 1 T (more than 2 X India) and in 2010, it will be around $ 5 T (more than 3 X India). With Indian growth rates finally creeping above 8 % on a sustained basis, the Indian economy will be $ 3-4 T (current prices) by 2020
What do you think? What needs to change to make this happen? Who do you think will ring the bell on NASDAQ in 2015?