earnings call that they are in no rush to sell their stakes in and Policybazaar, the two companies which listed on Indian bourses last year.
Bikhchandani’s comments come at a time when Zomato is facing significant selloff pressure as a result of market volatility, concerns around corporate governance and lack of disclosure, especially around its
acquisition of Blinkit, a quick commerce firm.
The stock was further under stress after last month’s
expiration of the pre-IPO lock-in period for Zomato investors, when firms including ride-hailing major Uber and
Tiger Global sold shares in the food-delivery company.
Bikhchandani said it is possible that the use of the money received from the sale of the company’s stakes in Zomato and Policybazaar will result in “sub-optimal” investments. He went on to clarify that the final decision would be made by the board of the company.
“Typically, a fund has to write all its first cheques three years before the close of the fund. Suppose we were to deploy Rs 10,000 crore from the two exits. That would mean investing in 300 early-stage companies at an average cheque size of Rs 10 crore,” he said.
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Currently, Info Edge owns a 15.3% stake in Zomato and 13.3% in Policybazaar.
“If you sell the stake, then you have only 1X of the money. Whereas if you hold on to the stake, the money might multiply in the future. My view is if a business has legs, why not hold on to it for a while? However, nothing is etched in stone and ultimately the board decides on such matters,” Bikhchandani added.
Concerns about founders receiving a significant portion of employee stock ownership plans (Esops) from newly listed tech firms were also addressed by Bikhchandani.
“I think it is important to look at each case separately and look at a few things. First, was there disclosure of the Esops prior to IPO? The second thing is if founders have been forced to dilute too much of their shareholding, will they have (enough incentives for) 5-7 years to run the ship,” he said.
“If the dilution was a result of competitive raising, there could be a more sympathetic view… maybe some amount (of Esops to founders) is justified… such as 1-3% of the company. We also need to see whether the founder took the decision himself or if executive directors were on board in the process,” he added.
