India to get a dozen billionaires from start-ups by 2020: ASSOCHAM

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By IndiaTomorrow.net,
New Delhi, 03 Aug 2015: India is set to produce a score of fresh billionaires as well as millionaires in the next five years from among the start-ups, an ASSOCHAM study pointed out. The Associated Chambers of Commerce of India (ASSOCHAM), the country’s apex chamber of commerce and industry, conducts regular studies on the growth trajectory of businesses in India.
“India will be among the top among the Asian start-ups along with the Chinese and the South East countries. However, the structural problems in China are likely to create road blocks for the start-ups there. No such issue confronts the Indian start-ups,” the paper said.
The ASSOCHAM report comes as a respite close on the heels of a recent report by property consultant Knight Frank revealing that about 27% of India’s 160,600 high-net worth individuals (HNWIs) have left the country for better future in the United States, the United Kingdom and Australia. The Knight Frank report, however, said that India is also likely to see the number of billionaires increases to 136 by 2024 from the current 68. The ASSOCHAM report confirms this speculated rise in the number of billionaires.
The ASSOCHAM study points out that at least dozen billionaires will rise up from among start-ups by 2020. The commerce and industry body said that the maximum of value creation is expected in the fledgling e-commerce, music-entertainment, payment gate-ways and city transport aggregators like radio taxis. The travel arena, especially in the ticketing and booking has already gained some level of maturity.

On the flip side, the ASSOCHAM paper mentioned there might be a high rate of mortality as well. Those, entering the business only with the idea of commanding valuations and making exits would find it difficult going forward.
And the untapped areas that the study marked are online business including e-learning, medical consultations (with fool-proof safety features) and social networking, according the commerce body.
“Even though there are question marks on the kind of valuations some of the start-ups command, at least in India, we do not see any bubble like situation and the interest from the angel investors is expected to continue,” ASSOCHAM Secretary General D.S. Rawat said.

In this connection, the paper added, “The angel investors include some of the top industry leaders like Ratan Tata, Azim Premji and N R Narayan Murthy. Their presence would certainly have a moral pressure among the entrepreneurs who would like to stay put and prove their mettle rather than make quick bucks.”
Per the ASSOCHAM study, even though the market-regulatory body SEBI is putting a friendly regime for the start-ups to raise finance from the bourses, it would take some time before funds are raised through this channel.

“However, it would be only when at least five six large-size players such as Flipkart or Snapdeal come out with the IPOs, the real price discovery would take place and the process of start-ups turning into billionaires and millionaires would take shape,” the ASSOCHAM study added.

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