Indian Startups Raise Over $20 Billion
Indian technology startups have shown massive growth this year as the funding rises over $20 billion. Global venture capitalists and private equity firms are allocating more funds to Indian startups than China as it amped up regulatory clampdown on its tech companies.
Record market listings and crackdown in China has come to India’s aid for funding. According to the data by Venture Intelligence, Indian companies raised $20.2 billion across 576 deals, as compared to $13 billion from 878 deals in 2019. According to the statistics, manufacturing startup Zetwerk raised $120 million from a group of investors for a valuation of $1.4 billion, surpassing the $20 billion mark. This mark was breached in just 8 months, which is a record high level for India.
There are still four months left for this year to end, and it seems that the run-up has not died yet. Low interest rates in the US are encouraging them to fund emerging markets along with profitable market listings, and China's crackdown on technology companies has made India the next best destination for investors.
IT Ministry Joins Hands with Paytm
Digital payments and financial services portal Paytm signed an agreement with the IT Ministry to support deep tech startups by providing access to their platform.
Just before its IPO, Paytm signed an MoU with the IT Ministry to create a vibrant ecosystem for SaaS and startups that are working on the deep-tech platform technologies such as artificial intelligence, machine learning, cloud computing, etc. Paytm will provide mentorship, technological assistance etc., to these startups to grow their businesses.
This is a big move for Paytm, considering its IPO is just around the corner. The support from the government would be seen as a key positive for the investors. Additionally, it seems the government is encouraging all new-age startups towards innovation, which is beneficial for more tech heads to line up.
FIIs Exiting Indian Stock Market
Foreign Institutional Investors (FIIs) have consecutively sold shares in the cash segment for eight trading sessions. In August itself, they sold Rs 6,873.74 crore in the cash segment.
With central banks of Sri Lanka and South Korea increasing their interest rates, FIIs believe that other countries might also do the same, which is one of the reasons behind their declining interest in the Indian stock market. Also, rising COVID-19 cases and a threat of a third wave has alerted FIIs. Additionally, sluggish economic recovery is also one of the reasons.
FIIs have been net sellers in FY22, and the same is expected for the rest of the year. Liquidity in the system is wearing off now, and the stretched valuations pose a threat to a market correction.
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