India is a hub for some of the most creative and impactful startups in the world. With over 100,000 startups registered as of 2023, the country holds the third-largest startup ecosystem globally. This marks a massive leap from just 450 recognized startups in 2016. The rise is driven by a surge in tech-driven initiatives, financial backing from angel investors and venture capitalists, and a young, innovative workforce. Notably, a significant portion of this growth arises from emerging sectors like deep tech, which has seen increased adoption across Tier-II and Tier-III cities
As startups expand, they’re opening up new chances for people to invest in unlisted shares. These investments can potentially bring significant financial rewards, but many new investors are unsure where to begin. To simplify this, we’ve gathered details about some promising Indian startups offering unlisted shares. Let’s dive in!
Indian Startups With Unlisted Shares:
Investing in unlisted shares of Indian startups can present great opportunities, especially if you’re able to carefully evaluate the company’s financial health, market position, and growth potential. Here’s a look at some popular Indian startups to consider:
- BoAt
Sector: Consumer Electronics
BoAt is a homegrown brand that has made a name for itself in the audio device and smartwatch market. The company is now one of the top 5 global players in audio systems, known for its products’ performance and durability. BoAt’s assets are estimated at around $10 billion, and it’s growing rapidly.
Things to Keep in Mind: While BoAt has shown solid growth in terms of both revenue and profitability, the market it operates in is very competitive. To keep growing, the company will need to stay ahead with new product innovations and continue to push its marketing strategies.
Why Consider Investing:
Leader in its Market: BoAt is a major player in India’s audio product industry, especially in the budget-friendly category. Its popularity among young buyers makes it a strong contender in the consumer electronics space.
Solid Financial Growth: BoAt has seen steady profitability while expanding quickly, which shows it’s on the right track.
Expanding Consumer Base: As India’s youth demand more stylish, affordable tech, BoAt is well-positioned to cater to this growing segment.
Potential IPO: There’s a chance that BoAt could go public in the future. If that happens, early investors might see a good return on their investment.
Investing in BoAt unlisted shares provides a unique opportunity to be part of the company’s growth journey before it potentially goes public. With strong market leadership and consistent financial performance, BoAt could be a valuable addition to an investment portfolio.
- Digit Insurance
Digit Insurance is reshaping the general insurance industry by offering a wide range of products with a strong focus on digital platforms. With its tech-driven approach, the company has made insurance more accessible and customer-friendly. As part of its growth strategy, Digit Insurance has filed for an IPO, aiming to raise significant funds to fuel its expansion and further transform the insurance space. The IPO is expected to bring in a financial boost that will help the company continue innovating and offering customer-first solutions.
Growth Potential:
Digit currently holds around 3% of the health insurance market in India, which leaves plenty of room for growth. However, the insurance industry is highly regulated, and competition is rising. Despite this, Digit’s focus on digital services positions them well to grow in this space.
Why Consider Investing in Digit Insurance?
Innovation in Insurance: Digit Insurance has stood out in the industry by bringing a fresh, digital-first approach to general insurance, making it more customer-friendly.
Steady Growth: The company has been seeing consistent growth with increased premium collections and improved profitability, which shows it’s heading in the right direction.
Upcoming IPO: The company is set to launch an IPO, with shares priced between Rs 258-278 each. There’s already strong interest in their unlisted shares, which are trading at a premium.
Industry Opportunity: The insurance market in India is still underdeveloped, offering huge opportunities for growth. This could be a strong area for Digit to expand and reach more customers.
- Swiggy
Industry: Food Delivery & Quick Commerce
Overview: Swiggy is one of the top food delivery services in India. Known for its quick and reliable service, it has built a strong customer base over the years. Recently, Swiggy has also moved into quick commerce with its Instamart service, which delivers groceries and daily essentials. This shift shows the company’s efforts to grow beyond just food delivery and explore new business areas.
Challenges: While Swiggy is a big name in food delivery, it operates in a competitive market with tight profit margins. Making a profit consistently is one of the company’s major challenges. How well it performs financially will play an important role in determining its future valuation.
Even with these challenges, Swiggy’s continued growth and willingness to innovate make it an interesting investment option. Looking at its progress in both food delivery and quick commerce, Swiggy shows potential for strong returns if it keeps growing at this rate.
Reasons to Invest:
Leader in Food Delivery:Swiggy is one of the top players in the Indian food delivery market, competing closely with Zomato.
Expansion into Quick Commerce:The launch of Instamart signals Swiggy’s ability to innovate and diversify its revenue streams.
Room for Growth:With both the food delivery and quick commerce industries growing, especially in smaller cities, Swiggy has a lot of potential for further expansion.
Possible IPO:If Swiggy goes public, it could be a chance for investors to see their shares grow in value.
Strong Brand Loyalty:Swiggy has built a trusted name in the industry, attracting a loyal customer base, which adds to its appeal as an investment.
- OYO Rooms
Sector: Hospitality
Overview: OYO is a well-known brand that offers budget-friendly hotels and accommodations around the world. The company has recently filed for an IPO, marking an important step toward becoming publicly listed. In FY24, OYO reported a net profit of ₹100 crore, showing that it is on the right path financially.
Still, OYO faces challenges, such as regulatory issues and managing its partnerships. To continue growing, it will need to maintain profitability and manage its large network of properties well.
Why Invest in OYO:
Recognised Brand:OYO is a leading name in the budget and mid-range accommodation space, with a presence both in India and abroad.
Profitability:The company’s recent profitability makes it a more attractive option for investors.
IPO Opportunity:OYO’s upcoming IPO could offer a good chance for investors to profit from their current holdings.
Travel Industry Recovery:As travel picks up again after the pandemic, OYO is likely to benefit from increased demand for budget-friendly stays.
- Razorpay
Sector: Fintech (Payment Gateway)
Overview: Razorpay has become a major player in India’s digital payment sector, offering payment gateway services. The company is valued at ₹62,100 crore and is planning to go public in the next 2-3 years.
Why It Might Be Worth Investing:
Industry Leader:Razorpay has established itself as one of the top payment gateways in India. The company benefits from the rapid growth of the digital payments sector, which is being driven by government initiatives like UPI and Digital India.
Solid Growth:Razorpay has seen consistent growth in transaction volumes, which has contributed to its impressive valuation. This shows that the company is on the right track and is likely to continue expanding as more businesses shift to digital payments.
Market Potential:The digital payments market in India is expected to grow exponentially, creating opportunities for Razorpay to tap into even more business. Government programs, like the push for a cashless economy, are likely to drive demand for digital payment solutions.
Service Expansion:In addition to its core payment gateway services, Razorpay has diversified into other areas such as payroll management and lending. This broadens its revenue streams and helps the company cater to a wider range of business needs.
IPO Opportunity:Razorpay is preparing for an IPO, which could offer early investors a chance to exit with a significant return. The company’s strong position in the fintech sector, along with its diverse service offerings, makes it a solid option for investors looking for growth opportunities in the digital space.
Closing Thoughts
Investing in unlisted Indian startups could be a smart move if you’re willing to do your homework and stay patient. While there are risks, the rewards of getting in early can be big. With the startup scene booming, now might be a good time to explore these opportunities before they hit the public market.
Disclaimer: Investing in unlisted shares carries risks, including market volatility and liquidity constraints. This article is for informational purposes only and not investment advice. Please conduct your own research or consult a financial advisor before making any investment decisions.