Credit Suisse sees a couple of Indian fintechs approaching public markets this year.

According to Ashish Gupta, Head of Asia Financials Securities Research and Head of India Securities Research, Credit Suisse, said: “The number of fintechs in public markets are limited... We expect that to change in the current year itself. We expect a couple of fintechs to come to public markets this year,” said Ashish Gupta, Head of Asia Financials Securities Research and Head of India Securities Research, Credit Suisse, at a virtual press briefing during the 24th Credit Suisse Asian Investment Conference.

Responding to a query on how foreigners can invest in the growing Indian fintech ecosystem. Gupta said foreigners can invest in both private as well as public market fintechs.

“Indian fintech companies have attracted $10 billion of capital and are now at the forefront of India’s start-up ecosystem. Digital payments are primarily leading the fintech scale-up in India and have grown 10 times over the last five years, now having a 30 per cent share totalling $450 billion,” he added.

In tandem

Gupta highlighted that fintech growth in India is not just happening as a challenge to incumbents. “It is happening in partnership with the incumbents and we are seeing incumbents also rapidly digitising. As much as 50-70 per cent of the business of incumbents come through digital channels, which are proprietary or in partnership with fintechs.

“We should not think fintechs as disruptors or competition for the incumbents. We believe the fintech growth in India is going to increase the overall penetration of financial services and, therefore, the pie grows bigger rather than getting sliced into smaller pieces.”

A recent Credit Suisse report, has highlighted highted that an unprecedented pace of new-company formation and innovation in a variety of sectors resulted in a surge in the number of highly valued and as-yet-unlisted companies. Against 336 listed companies with a $1-billion market capitalisation, there are now 100 unicorns in India with a combined market capitalisation of $240 billion.

Neelkanth Mishra, Co-Head of Equity Strategy, Asia Pacific and India Equity Strategist at Credit Suisse, said: “Our research found 100 unicorns in India in a diverse set of industries, including technology and tech-enabled sectors, such as, pharmaceuticals/biotech and consumer goods, benefiting from formalisation and accelerating digital adoption. Fast-growing and innovative (unlisted) firms are sprouting up in new sectors as well as locations across India, rapidly gaining scale as they ride unique growth opportunities from digital public infrastructure and partnerships.”

The sectoral split is highly diversified for these 100 unicorns, in addition to the largely expected e-commerce, financial technology, education technology, food delivery, and mobility companies. Furthermore, there is a rapidly growing number of firms in industries such as Software-as-a-Service (SaaS), gaming, new-age distribution and logistics, modern trade, biotech, and pharmaceuticals. Even fast-growing consumer brands have benefited from accelerating internet penetration and formalisation of sectors.

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