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We don't run a predictable business, no near-term IPO for us: Zerodha's Nithin Kamath

We don't run a predictable business, no near-term IPO for us: Zerodha's Nithin Kamath

"We realize that when you go public, you are under a lot of scrutiny and hence you need to be a lot more predictable," Kamath said at an event.

Zerodha's co-founder Nithin Kamath Zerodha's co-founder Nithin Kamath

At a time when the unicorns are lining up before the stock exchanges at rising valuations, online broking firm Zerodha's co-founder Nithin Kamath is steering clear of the IPO rush.

According to the young tech CEO, predictability of a company or business is very important if it decides to go public, something that Policybazaar CEO, Yashish Dahiya agreed upon during a panel discussion on the fintech IPOs at Razorpay's annual programme on Thursday.

"In our business, there is no predictability despite Zerodha being a large player in the trading ecosystem now. We have equally grown in terms of revenue and profits, but our fortunes are heavily dependent on exchange traded turnover," Kamath said at the Razarpay event. "And we realize that when you go public, you are under a lot of scrutiny and hence you need to be a lot more predictable," he added.

Meanwhile, Policybazaar's CEO Dahiya concurred that business predictability and a 10-year-long vision towards developing the company are some of the essential ingredients that a company headed for IPOs should have.

"Over the last 20 quarters for instance, there was a lot of predictability in our business, which prompted us to go public as against the earlier years," Dahiya said.
To recall, Policybazaar raised Rs 5,710 crore in November this year debuting on the stock exchanges at a 23 per cent premium.

"But before we listed, I heard of people trying to sell shares for over Rs 2,000 and I was furious at why the shares are being sold at higher prices," Dahiya said. He added that profitability is not a near term goal for the company and the approach is growing the business with customer-centric mind.

The two tech leaders also shared various investment tips for the retail investors with Razorpay CEO Harshil Mathur during the programme. Dahiya made a surprising remark that he has not 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.

On the cryptocurrency front, Kamath described cryptocurrencies classification as an asset class which could emerge as a risk to the equity markets because of the huge capital involved in the digital assets. "Ultimately money chases money," Kamath said.

Also Read: Nithin Kamath explains why Zerodha is conservative about its valuation

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Published on: Dec 09, 2021, 9:53 PM IST
Posted by: Mohammad Haaris Beg, Dec 09, 2021, 9:45 PM IST