Indium Tech Valuation Update - December 2024

Welcome to Indium Capital’s Quarterly update on Tech Valuations in India. The key highlights are summarized below.

Indium Capital tracks valuation trends for the Listed Tech Startups in India, through our custom index: Indium Tech Startup Index (ITSX).

ITSX is a market capitalization weighted index composed of 17 listed tech startup stocks across 5 broad segments with a combined market cap of ~Rs 700k crores (~$ 80bn). Out of these, Info Edge, Justdial, Matrimony and Affle have been listed and publicly trading for many years, and the rest have been listed in the last 3-4 years.

ITSX vs. Sensex (1 year)

All Listed Tech Startups vs. ITSX vs. Sensex (1 year)

Key Observations

A. Valuations

1. While most tech stocks (13 out of 17 Listed Tech Startup companies) lagged BSE Sensex during 2022 & 2023, many have outperformed Sensex over the last 12 months

2. Zomato has seen highest growth in market-cap in the last 12 months driven by highest Revenue Growth and improvement in EBITDA

3. Travel stocks and selected consumer stocks (Nykaa and Mamaearth) have not just underperformed BSE but their valuations have also de-grown from Nov-23

B. Revenue & Profitability

1. Most companies have seen a healthy growth in Revenue

• 3 companies with a revenue growth of 50%+; 5 companies with revenue growth between 25-50%
• Decline in revenue for Paytm, Matrimony and Mamaearth

2. 16 Listed Tech Startup companies (other than Swiggy and Paytm) have a positive Adj. EBITDA margin in Q2-FY25

• 6 companies have Adj. EBITDA margins of 20%+,
• 5 companies have margins in the range of 10-20%

C. Valuations: Price/Revenue multiples vary widely across stocks (from ~2x to ~41x)

1. Most of the larger-cap stocks (market cap of Rs 10k cr+) are trading at ~10-20x Revenue, and the smaller-cap stocks are at ~4-10x

2. Classifieds & Marketplace companies typically have Price/Revenue multiples of ~9-12x, Consumer-tech companies are at ~5-9x, and SaaS companies are at ~6-12x

3. Highest Price/Revenue multiple: Info Edge, followed by Policybazaar and Zomato (~41x, ~24x, and ~18x respectively in Q2-FY25)

Trading Multiples

Disclaimer: Indium Capital Advisors (ICA) is an investment banking advisory firm based out of Bangalore. The information provided in this article is derived from publicly available data. ICA does not guarantee the accuracy and completeness of the data presented in this article. ICA or any of its connected persons including its directors or subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained, views and opinions expressed in this article. The information and commentaries in this article must not be construed as an investment recommendation/endorsement or solicitation of an offer to buy/sell any securities. This article is purely for educational and informational use only.