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Counting Unicorns

India remains the world's third-largest start-up hub after the US and China with nearly 52 start-ups having the potential to become unicorns.
Team BT        Print Edition: December 1, 2019
COUNTING UNICORNS

A report by Nasscom mentions a robust addition of 1,300 start-ups in the past one year, taking the total tally in India to 8,900-9,300. Interestingly, seven new companies joined the coveted unicorn club, taking the total unicorn tally in the country to 24 from 17 in 2018. While seed stage funding is still facing a crunch, early stage funding (series A and B) saw an uptick of nearly half a billion from $1.1 billion in 2018 to $1.6 billion till September 2019. India remains the world's third-largest start-up hub after the US and China with nearly 52 start-ups having the potential to become unicorns. While IT industry body Nasscom believes that by 2025, start-ups could provide over 10-12 million direct jobs and nearly 40 million indirect jobs, the bigger problem of investor exit through the market route requires attention to ensure growth of the sector. Rukmini Rao

GST cut

Hospitality sector gets a boost

Things are looking up for the hospitality sector. After years of flat growth, hotel companies can expect higher growth in revenues and net profits in the current financial year. Ratings agency CARE Ratings has predicted 6-8 per cent revenue growth for hotel companies, whereas net profit margins are expected to improve to 6-6.5 per cent, up from 3.5 per cent in the previous financial year. The key drivers of growth are going to be GST rate cuts (particularly for boosting net profits) and higher domestic leisure spending. The GST rates were slashed right before the beginning of the peak season - October to March - and would benefit mid-scale and upscale categories the most. At present, nearly 94 per cent branded hotel rooms in the country - over 1.33 lakh - are under these categories. Though the aim of the GST rate cut was lowering of room rates for end consumers, it's widely believed that the hotel companies are going to gain more from this. Manu Kaushik

FESTIVAL SALES

Revival Trends

Consumer durables retailers such as Croma saw a 20 per cent rise in sales during the festival season (September and October). Though this is close to 10 percentage points lower than the festival season last year, retailers are happy as the period this year saw more footfalls compared to July-August when both footfalls and sales had shrunk. According to Ritesh Ghosal, Chief Marketing Officer, Croma Infiniti Retail, bulk of the sales came from premium categories such as high-end smartphones, refrigerators and 55-inch smart TVs, while sales of entry-level products in such categories were not encouraging. Even in the premium category, it was aggressive pricing that wooed consumers. Apple, for instance, dropped prices of its new launches this year by close to Rs 25,000, while 55-inch smart televisions, which earlier cost upwards of Rs 1.5 lakh, were priced Rs 1 lakh and upwards. The festival season sales may have come on the back of aggressive pricing by brands and retailers, but it has at least set the consumption ball rolling. Ajita Shashidhar

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