M-Cap Of 32 New-Age Tech Stocks Crosses $100 Bn Mark In 2024

The cumulative market capitalisation of 19 new-age tech stocks, which stood at $40.6 Bn at the end of 2023, zoomed 67% in 2024 on the back of improvement in fundamentals and a rally in the broader equity market.

These stocks, including Zomato, Paytm, PB Fintech, Nykaa, Nazara Technologies, ideaForge, Yatra, and EaseMyTrip, among others, ended the year with a cumulative market cap of $67.6 Bn.

Zomato, Paytm, PB Fintech, Zaggle, and CarTrade Technologies were the key companies which drove this upsurge in market cap on the bourses.

Besides the 19 new-age tech stocks that were already trading on the bourses last year, 13 other startups made their public market debuts in 2024. Together, the 32 new-age tech stocks ended the year with a market cap of $101.22 Bn.

Profitability Shines Through

Profitability has been the central focus in the Indian startup ecosystem over the past two years, following the lessons learned by loss-making companies during the global market slowdown in 2022 after the Covid-19 era.

Both listed and unlisted new-age tech companies, including those preparing for public listings, are prioritising profitable growth to meet the expectations of investors. 

The resurgence of companies like Zomato, PB Fintech, and Paytm highlights the growing preference of public market investors for profitability.

Foodtech giant Zomato, which saw its valuation plummet by 60% to $6 Bn in 2022, staged a remarkable recovery in 2023. By posting profits in consecutive quarters from March to September 2024, Zomato further gained investor confidence. Its market capitalisation surged to $31.7 Bn by the end of 2024 from $12 Bn at the end of 2023, driven by improved profitability and the launch of new products. The icing on the cake was its inclusion in benchmark index BSE Sensex.

Similarly, PB Fintech experienced a strong turnaround. Its market cap more than doubled to $4.2 Bn by the end of 2023, thanks to significant improvements in its bottom line. The momentum continued in 2024 as well, as PB Fintech turned profitable in the December quarter (Q3) of FY24 and expanded product offerings and market reach, leading to a 160% surge in its market capitalisation.

Paytm’s journey this year serves as another example of profitability reshaping fortunes on D-Street. The fintech major’s market capitalisation slumped to $2.6 Bn in February 2024 from $4.8 Bn at the end of 2023 after a regulatory clampdown on Paytm Payments Bank by the Reserve Bank of India (RBI). However, as the company turned profitable in Q2 FY25, largely due to the sale of its entertainment and ticketing business to Zomato, its valuation surged. By the end of 2024, Paytm’s market cap exceeded $7 Bn. 

Profitability or providing a clear path to profitability in the near term also played an important role in making IPOs of startups like ixigo, TBO Tek, and Awfis successful in 2024. 

As Lightspeed’s MD Anuj Bhargava told Inc42, “As a blanket rule, profitability and strong unit economics is a must-have. There can be exceptions for extremely large names, but it’s not the norm.”

Innovation & Expansion Driving Stocks Higher

Besides profitability, the other visible trend in the public market is the investors’ clear preference for new-age tech companies that can keep innovating while improving both top and bottom lines.

For instance, Zomato forayed into the events and ticketing business with the launch of ‘District’ app, which also had an impact on its growth on the bourses.

A Gurugram-based events company manager recently told Inc42 that it has become crucial for any consumer internet company to diversify its revenue streams, and Zomato is doing the same. 

Similarly, PB Fintech’s healthcare foray became a game-changer for the company this year. Even though there were concerns initially about its possible impact on the company’s balance sheet, investors became bullish once these concerns were addressed.

Prashanth Tapse, senior VP (research) at Mehta Equities, said this is a good opportunity to invest in PB Fintech given its foray into the healthcare space, which is a growing market. Besides, the company has the power of technology with it, he added.

Similarly, Nazara Technologies was on an acquisition spree this year after raising fresh funds. Though regulatory overhang on online gaming remained, hindering Nazara’s growth to an extent, the company managed to touch $1 Bn in market cap by the end of 2024. At the end of December 2023, its market cap stood at $0.75 Bn.

Zaggle’s growth on the bourses during the year was also driven by new product launches and expansion, along with profitability. With the acquisition of Span Across IT Solutions, the fintech SaaS company said it would enter a new segment – employee-related business. 

Better Understanding Of New-Age Tech Businesses 

While Zomato, Paytm, Nykaa were among the first set of new-age tech startups to go public in 2021, they suffered a rout on the bourses in 2022. While the negative sentiment in the broader market was one of the reasons for it, many market experts also believed that the public market was getting accustomed to the functioning of these companies at the time. 

Almost three years later, analysts believe that the market, especially retail investors, have a better understanding of the challenges and the growth prospects of new-age tech companies.

For instance, Swiggy and Ola Electric are both loss-making entities. However, their public issues garnered significant market interest. While Ola Electric is up over 26% from its listing price, Swiggy is trading around 40% higher from the listing price.

Both the companies are among the top players in their respective segments and operate in fast-growing markets, which seems to have helped their stock price. Besides, the surge in share prices of the likes of Zomato and RateGain has provided a strong footing for new-age tech companies listing on the stock exchanges.

Speaking on this, Krishna Appala, senior research analyst at Capitalmind, recently told Inc42, “Concepts like blitzscaling, front-loaded costs for long-term benefits, and the importance of scaling have gained acceptance among Indian investors.” 

And this is what seems to be behind the rise in the market capitalisation of new-age tech stocks. 

New Entrants Add Over $33 Bn In M-Cap

Compared to 2023, when only five startups went public, 2024 saw 13 startups going public, including names like Go Digit General Insurance, FirstCry, Swiggy, MobiKwik, Awfis, Ola Electric, among others.

At the end of the year, the total market cap of these 13 new-age tech companies stood at $33.6 Bn, which is 33% of the current cumulative valuation of the Indian new-age tech stocks under Inc42’s coverage.

Meanwhile, the broader market sentiment was also positive in 2024. As per a report by Pantomath, H1 of FY25 (April-September period of 2024) saw 40 Indian companies raise INR 51,365 Cr through mainboard IPOs, a 95% jump over INR 26,311 Cr made in the same period in FY24.

Benchmark index Nifty50 has gained over 8% in 2024. Helped by a surge in domestic flows and a resilient macro landscape, the Nifty touched its all-time high at 26,277 in September this year.

While the broader market saw volatility in November and December, Motilal Oswal expects a recovery to take place in the second half of 2025 after consolidation in the first half. 

“Indian markets are likely to face significant influences from a combination of global and domestic economic events. The anticipated rate cut by the RBI in February 2025, the ongoing trend of US rate cuts, and the expectations surrounding trade policy changes post Donald Trump taking over as US President in January 2025 will contribute to market volatility,” Motilal Oswal said in its Market Outlook 2025. 

Besides, investors will also keep a keen eye on the Union Budget 2025-26, likely to be presented on February 1 by finance minister Nirmala Sitharaman.

Due to the aforementioned factors and the ongoing IPO momentum, the public issue boom is likely to continue next year as well. Over 20 new-age tech companies are expected to go public in 2025, including BlueStone, Ather Energy, Zepto, among others.

[Edited by Vinaykumar Rai]

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