The Shadows of Dotcom Bubble in Indian Startup Environment

8/17/2019 The Shadows of Dotcom Bubble in Indian Startup Environment

1/23

SHADOWS OF DOTCOM BUBBLE IN INDIANSTART-UP ENVIRONMENT

NAME : KARAN JAISWAL

BBA DEPARTMENT

St. XAVIER’S COLLEGE, KOLKATA

ROLL NO: 95


2/23

OBJECTIVES OF STUDY

To pro!"# $% o#r!#& o' t(# "ot)o* +++-# &!t(r#p#)t to /S #)o%o*0.

To t"0 t(# $r!o '$)tor -#$"!%1 to t(# "ot)o*+++-#.

To pro!"# $% $%$-0! o' $r!o /S to)2 *$r2#t!%"!)# "r!%1 t(# "ot)o* +++-# 34996778

To pro!"# $% o#r!#& o' I%"!$ St$rt /p#%!ro%*#%t.

To %" !*!-$r!t!# +#t#% "ot)o* +++-# $%" t(#t$rt6p 'r#%0


3/23

RESEARCH METHODOLOGY

S#)o%"$r0 "$t$ #" !% t(! t"0 .T(# 'o--o&!%1*#t(o"o-o1!# ($# +##% $pp-!#" !% or"#r to )o*p-#t#t(! pro;#)t :

D$t$ ($ +##% #


4/23

DOTCOM B/BBLE OVERVIEW 3/S ECONOM= 4996778

A +++-# ! $% #)o%o*!) )0)-# )($r$)t#r!#" +0r$p!" #


5/23

DOW JONES INDUSTRIAL AVERAGE (1990-2002)

O% No#*+#r 74, 4995, t(# DJIA )-o#" $+o# t(# 5, -##- 35,7.558 'or t(# rtt!*#.

O% M$r)( 79, 4999, t(# $#r$1# )-o#" $+o# t(# 4, *$r2 34,.F8 .

O% M$0 , 4999, t(# Do& $)(!##" !t rt )-o# $+o# t(# 44, *$r2 344,4.8.

Tot$- 1$!% 'or t(# "#)$"# #


6/23

US GDP GROWTH RATES (1991-2005)

499 ($ +##% t$2#% $ t(# +$# 0#$r $%" 4 /S +!--!o% ($ +##% t$2#% $ +$#pr!)#.I% 4999 t(# GDP 1ro&t( r$t# p!2#" p $%" t(#% $'t#r t(# "ot)o* +++-# +rt !t )$*#t*+-!%1 "o&%.ro* 74 !t -o&-0 t$rt#" 1ro&!%1 $t $ t#$"0 p$)# %t!- 7F &(#% t(# /S #)o%o*0&$ (!t +0 $%ot(#r r#)#!o%. T(# GDP 1r#& -# t($% H o#r t(# 0#$r.

3Sor)#: (ttp:"$t$.&or-"+$%2.or1!%"!)$tor8


7/23

NASDA COMPOSITE (1990-2002)

O% J-0 4, 4995, t(# !%"#< )-o#" $+o# t(# 4, *$r2 'or t(# rt t!*#. It *$"# t#$"01$!% !% t(# 'o--o&!%1 0#$r to r#$)( 7, po!%t +0 499F, t(#% +#1$% to $))#-#r$t# !1%!)$%t-0

T(# !%"#< )-o#" !% 4999 $t ,9.4 po!%t. O% M$r)( 4, 7, t(# !%"#< %$--0 p#$2#" $t

$% !%tr$6"$0 (!1( o' 5,47.57,$%" )-o#" $t $% $--6t!*# (!1( o' 5,F.7. T(# "#)-!%# 'ro* t(!

p#$2 !1%$--#" t(# +#1!%%!%1 o' t(# "ot6)o* +++-# +rt. T(#r# r# *-t!p-# t(!%1

)o%tr!+t!%1 to t(! Dot6)o* +oo* $%" +t.

T(# !%"#< "#)-!%#" to ($-' !t $-# &!t(!% $ 0#$r, $%" %$--0 (!t t(# +otto* o' t(# +#$r *$r2#t

tr#%" o% O)to+#r 4, 77, &!t( $% !%tr$6"$0 -o& o' 4,4F.9. W(!-# t(# !%"#< 1r$"$--0

r#)o#r#" !%)# t(#%, !t "!" %ot tr$"# 'or *or# t($% ($-' o' !t p#$2 $-# %t!- M$0 7.

3Sor)#: =$(oo !%$%)#8


8/23

UNDERLYING FACTORS (DOTCOM BUBBLE)

C-tr$- $%" Po-!t!)$- )($%1#N#& I%'or*$t!o% T#)(%o-o10 C($%1# !% Mo%#t$r0 Po-!)0

T(# B$+0 Boo* E?#)t Ro-# o' N#& M#"!$ A%$-0t B!$%#

Gro&t( o' Mt$- %" E


9/23

INDIAN START6/P OVERVIEW

T(!r" r$%2!%1 $*o%1 1-o+$- t$rtp #)o0t#*. Appro


10/23

SIMILARITIES IN DOTCOM

BUBBLE IN USA AND INDIANSTART UP ENVIRONMENT


11/23

CANGE IN GOVERNMENT POLICIES

/S ECONOM=

R#p+-!)$% Co%1r# )$*# !%4995 $%" !% 499, t(# top)$p!t$- 1$!% t$< r$t# &$ )t'ro* 7FH to 7H.

E#% +#'or# t(# R#p+-!)$%Co%1r# )$*# !%to porp#op-# r# $%t!)!p$t!%1 $ )t!% t$< r$t#, &(!)( -#" to t(#(o-"!%1 o' to)2. T(! )$#"$% p&$r" pr#r# !% t(# to)2*$r2#t &(!)( ##%t$--0 )$#"$ +++-# &(!)( *#t !t '$t# o%44 M$r)( 7, &(#% t(# to)2*$r2#t )$*# t*+-!%1 "o&%.

INDIAN ECONOM= I% I%"!$ t(# BJP 1o#r%*#%t )$*#

!%to por !% 74, Mr. N$r#%"r$Mo"! 3Pr!*# M!%!t#r o' I%"!$8 ($#'or*#" *$%0 po-!)!# 'or t(# *oot(

r%%!%1 o' t$rt6p !% t(# )o%tr0. T(# I%"!$% 1o#r%*#%t ($ $-o

-$%)(#" $% $pp St$rt6/p I%"!$’ 'ort$rtp to r#1!t#r t(#*#-#&!t(!% 7 (or $%" $$!-1o#r%*#%t !%)#%t!# $%" r#)#!#$r!o r#-#$%t !%'or*$t!o%.

NASSCOM 4, St$rt /p Pro1r$*-$%)(#" +0 I%"!$’ Pr#*!#r IT!%"tr0 +o"06NASSCOM &(!)( $!*to )$-# p t(# t$rt6p #)o0t#*!% I%"!$ +0 4


12/23

BAB= BOOM EECT

/S ECONOM=

Pot Wor-" W$r II t(#r# &$ $r!# !% t(# +!rt( r$t# o' *$%0)o%tr!# !*!-$r #?#)t r###% !% T(# /%!t#" St$t#. It !+#-!##" t($t t(# !%'$%t +or%"r!%1 t(! t!*# r# $1#"+#t#% 5655 0#$r (#%)#r# *or# #%#r1#t!) $%"

&$%t#" to t$2# r!2. So t(#0)o*p#t#" $1$!%t #$)( ot(#r&(!)( *!1(t ($# -#" to t(#!%)r#$# t(# to)2 *$r2#t $%"t(#% $ +#>#%t '$--.

INDIAN ECONOM=

A))or"!%1 to t(# r#port +0NASSCOM t(# $#r$1# $1# o't$rt6p 'o%"#r ! 7F 0#$r$%" o' &(!)( *ot o' t(#* ($#$% MBA "#1r## or $r# 'ro*#%1!%##r!%1 +$)21ro%".

T(! *!1(t -#$" to )o*p#t!t!o%$*o%1 t(# 'o%"#r $%" t(#0

*$0 t$2# $r!o *#$r# to1ro& '$t#r $%" $t $%$11r#!# p$)#. #%)#, t(!2!%" o' tr#%" )$% +# r#-$t#" tot(# "ot)o* +++-# #r$.


13/23

AVO/RABLE MONETAR= POLICIES

/S ECONOM=

T(# to)2 *$r2#t +oo* +#1$% !% t(#+#1!%%!%1 o' 4995.

It &$ o% #+r$r0 7, 4995, t($t t(# OMC!%)r#$#" t(# !%t#r#t r$t# 'or t(# -$t t!*#%t!- A1t 7, 4999.

T(# '#" r# )tt!%1 !%t#r#t r$t# #r0$11r#!#-0 o% J$%$r0 , 74, &(#% t(##!"#%)# o' $ r#)#!o% &$ o% t(# (or!o%.

Sto)2 *$r2#t &$ !%"##" !1%!)$%t-0+o0#" +0 t(# %#& t($t t(# #" &o-" )tr$t# o $11r#!#-0, $%" t(# NASDA!%"#< #


14/23

INCREASE IN VENTURE CAPITAL FUNDING

/S ECONOM=

I%"tr!# !%)-"#" !% t(# $%$-0!

Co*pt#r $%" P#r!p(#r$-,E-#)tro%!)I%tr*#%t$t!o%, IT S#r!)#,

T#-#)o**%!)$t!o%, So't&$r# $%"N#t&or2!%1 $%" E>!p*#%t.

Tot$- I%#t*#%t 4,5,4,7,7,

Tot$- %*+#r o' "#$- 4,74.

T(# (!1(#t !%#t*#%t $*o%t o' 4,F, , ,7 $%" (!1(#t "#$- $*o%t!%1to 44F !% t(# 0#$r 7.

T(# (!1(#t p#r)#%t$1# o' tot$-!%#t*#%t too2 p-$)# !% 7 &(!)( !

44.7H. T(! (#r#+0 *$2# !t )-#$r#r t($t!%#tor r# r#$"0 to !%#t !% $%0t(!%1p#rt$!%!%1 to t(# !%t#r%#t.

A't#r 7, &(#% t(# to)2 *$r2#t )r$(

too2 p-$)# t(# !%#t*#%t $ -- $%*+#r o' "#$- )$*# "o&% $ p#op-#t$rt#" to r#$-!# t(#!r *!t$2#.

VENT/RE CAPITAL INVESTMENTS Q N/MBER O DEALS 49956773Sor)#: P&CNVCA Mo%#0Tr## R#port, D$t$: T(o*o% R#t#r8

PERCENTAGE O TOTAL INVESTMENTS 3Sor)#: P&CNVCA Mo%#0Tr## R#port, D$t$ T(o*o% R#t#r8


15/23

INDIAN ECONOM=

T(# +oo* !% 74 &$ "o*!%$t#"+0 *#1$ '%"!%1 ro%" !% I%"!$’-#$"!%1 #)o**#r)# *$r2#tp-$)# o'-!p2$rt $%" S%$p"#$- 'o--o&!%1 t(##%tr0 o' 1-o+$- r!$- A*$o% t(#pr#!o 0#$r.L$t# t$1# !%#t*#%t !%

-!p2$rt3 *!--!o%8, S%$p"#$-,$%" t$


16/23


17/23

INCREASE IN INTIAL P/BLIC OERING 3IPO8

/S ECONOM= T(# o#r$-- *$r2#t !% /SA pro")#" IPO &!t( 1ro pro)##" o' 4F.45 +!--!o% !%

7, )o*p$r#" to 5 IPO r$!!%1 95. +!--!o% !% 4999.

T(#r# r# 9 IPO +0 /.S. )o*p$%!# !% 7, $ 79H "#)-!%# 'ro* t(# F IPO !%

4999 .

I% 7 t(# t#)(%o-o10 IPO, &(!)( &$ $ro%" H o' $-- IPO 'or t(# rt t(r## >$rt#r,

'#-- to FH o' IPO !% t(# 'ort( >$rt#r. Pro)##" 'ro* t#)( IPO '#-- ##% *or# ($rp-0,"#)-!%!%1 'ro* FH o' IPO pro)##" !% t(# #)o%" >$rt#r to H !% t(# t(!r" >$rt#r $%"to 45H !% t(# 'ort( >$rt#r. I%t#r%#t6r#-$t#" IPO 'o--o" $ !*!-$r tr#%", "#)-!%!%1 'ro*

4H o' IPO !% t(# rt >$rt#r to H !% t(# 'ort( >$rt#r.

INITIAL P/BLIC OERING 49967 3Sor)#: 74 $-# $%" Dorr LLP8


18/23

INDIAN ECONOM=

A))or"!%1 to B!%# St$%"$r" $ *$%0 $ *$-- $%"*#"!* #%t#rpr!# 1ot -!t#" o% )$p!t$- *$r2#t &!t( IPO’ &ort(INR 7F )ror# !% t(# rt t#% *o%t( o' t(# o%1o!%1 )$- 0#$r3Apr!-456J$%$r0’48.

I%, )o*p$r!o% to 9 *$-- $%" *#"!* #%t#rpr!# &(!)( r$!#"INR 7F )ror# !% 74645. T(#r# ##* to +# !*!-$r tr#%" !% t(#IPO’ $ ##% !% t(# "ot)o* +++-# #r$.

O%# '$)tor &(!)( (o-" +# t$2#% !%to )o%!"#r$t!o% ! t($t t(#$+o# $%$-0! ! o' t(# &(o-# *$r2#t %ot $ p$rt!)-$r #1*#%t,o t(! '$)tor ;t 1!# p$rt!$- p!)tr#.


19/23

PSYCHOLOGICAL FACTOR

/S ECONOM=

M!%"#t &$ !%#t!%1 !%to)2 ! $ ro$" to >!)2r!)(# ($" $ )#rt$!% $pp#$-o% p#op-# &(!)( )$#" t(#to)2 pr!)# to r!#.

P#op-# &o-" ($# !%#t#"!% $%0t(!%1 &(!)( ($" t(#&or" "ot)o* $tt$)(#" to !t%$*#.

T(# #%tr# )$p!t$-!t "!"%’t&$%t to +# -#'t +#(!%" o t(#0!%#t#" t(#!r *o%#0 !% $%0!%%o$t!# !"#$ &!t(ot$%$-0!%1 t(# &(o-# pro;#)t.

INDIAN ECONOM= S$*# tr#%" )$% ##

r!1(t %o& !% I%"!$, p#op-#$r# )o*!%1 p &!t(

%*#ro t$rtp !"#$$%" t(# #%tr# )$p!t$-!t$r# '%"!%1 t(#* !%(op# o' (!1( r#tr%.

T(# !%)r#$# !% '%"!%1!% t$rtp (o" $1ro&t( r$t# o' 475H'ro* 74 to 745.


20/23

TECNOLOGICAL CANGES

/S ECONOM=

I% t(# 499’ $& (o&p#op-# 1ot #" to !%1 )#--p(o%# $%" (o& !t !*p$)t#" t(#

o-*# o' tr$"#r !% t(# 0#$rto )o*#.

It &$ !% t(# 4995 &(#% t(#Wor-" W!"# W#+ &$ "!)o#r#"$%" t(#% t$rt#" t(# #r$ o' t(#!%t#r%#t )o*p$%!#.

T(# t#)(%o-o10 p-$0 $ #r0!t$- ro-# !% $% #)o%o*0 !%to"$0’ &or-" $r#rro%"#" +0 o *$%0'$)!-!t!#.

INDIAN ECONOM=

$)!-!t!# )( $ t(#*$rtp(o%#, )-o"

tor$1#, (#$-t( t#)(, 'oo"t#)( #t), $%" t(#r# ($+##% %*#ro t$rt6p!% t(## $r#$ !% I%"!$.

T(! t#)(%o-o1!)$-$"$%)#*#%t *$0 -#$" to$ (!1(-0 )o*p#t!t!##%!ro%*#%t &(!)( -#$"to $ t$rt6p +++-#.


21/23

EVIDENCE O MISPRICING

/S ECONOM=

#To0.)o*

!r* #t$+-!(#" !% 499 IPO64999 37 ($r#8

V$-$t!o% F B!--!o% S$-# 9F6 *!--!o%

Prot 9F6 37F.8*!--!o%

D#-!t#" 'ro* N$"$> M$r)(74.

49 S#p 746L!t!1$t!o% o#rGo-"*$% S$)( Grop I%) ro-#!% t(# p#)t$)-$r r!# $%" '$-- o'#To0 I%) %$--0 #%"#" o% T(r"$0 &!t( )ort $ppro$- o' $.5 *!--!o% #tt-#*#%t.

To0 RU /S

!r* #t$+-!(#" !% 49F V$-$t!o% B!--!o%

S$-# 9F6 44.7 B!--!o%

Prot 9F6 M!--!o%


22/23

INDIAN ECONOM=

3Sor)# : E)o%o*!) T!*# 7Ft( #+ 748

A *t$- '%" *$%$1#" +0 Mor1$% St$%-#0 ($ *$r2#" "o&% t(#

$-# o' -!p2$rt ($r# +0 7H, !1%$--!%1 t($t 1-o+$- !%#tor+#-!## I%"!$ -$r1#t !%t#r%#t )o*p$%0 ! o#r$-#".

-!p2$rt &$ $t 45.7 +!--!o% r!1(t %o&. A 7H '$-- !% -!p2$rt ($r#pr!)# &o-" !*p-0 -!p2$rt $-$t!o% %o& ! $ro%" 44 +!--!o%.


23/23

MARK C/BAN

W(!-# t(# t#)( +++-# o' 7 &$ ##%t!$--0 $p+-!) to)2 +++-#, to"$0 +++-# ! !% t(# pr!$t#!%#t*#%t r#$-*, -#$!%1 t(o# &(o $r# !% too "##p%o &$0 to #)$p#. T(o$%" o' $%1#- !%#tor ($#%2 -$r1# * !%to pr!$t# )o*p$%!#, +t ($# %o*#)($%!* to -!>!"$t# t(#!r !%#t*#%t !' t(#r#’tro+-#. T(#0 )$%t #-- t(#!r po!t!o%, ##% !' t(#0r#$-!# !t &$ $ *!t$2#.U

Documents

The Shadows of Dotcom Bubble in Indian Startup Environment