Indian Startup IPOs & Earnings Reports, Q3 2021: How India’s new-age tech companies performed after

INDIAN STARTUP IPOs & EARNINGS REPORT, Q3 2021 How India’s new-age tech companies performed after public debut

Table Of Contents

23

Quarterly Financial & Stock Performance Sales & Expenditure Stats The Rise In Revenue Per Paying Subscribers IndiaMART: Strong Points & Concerns

03 Executive Summary 04 Indian Startups In The Stock Market Arena

30

37

09 Zomato’s Delectable Performance Quarterly Financial & Stock Performance Sales & Expenditure Growth The Rise Of Monthly Transacting Users Zomato: Strong Points & Concerns

EaseMyTrip’s Performance Soars Quarterly Financial Performance Stock Performance Since IPO Sales Vs Expenditure EaseMyTrip: Strong Points & Concerns

44

CarTrade On The Right Track?

Financial & Stock Performance Sales Vs Expenditure Growth Jump Users & Listing CarTrade: Strong Points & Concerns

16 All About Nykaa’s Performance Makeover In Q3 Quarterly Performance Nykaa’s Stock Performance Mapping Sales & Expenditure Growth Category-Wise Performance & Order Split Nykaa: Strong Points & Concerns

Nazara’s Cutting-Edge Performance Quarterly Financial & Stock Performance Decoding The Sales & Expenditure Growth The High Performing Segments Nazara: Strong Points & Concerns

IPO Performance Of New-Age Tech Companies Anchor Rounds & Money Raised Through IPOs

07 A Landscape: Quarterly Financial Performance Of New-Age Tech Companies

How IndiaMART Fared In Q3 2021

51

The State Of New-Age Indian Startup IPOs

52

Upcoming Indian Tech Companies’ IPOs

Executive Summary 16+

Zomato

Upcoming Indian Startup IPOs

Has The Highest Market Cap Among Listed Indian Startups

IndiaMart

$56 Bn

Had The Highest ROAS In FY21

Combined Market Capitalisation Of New-Age Publicly Traded Companies

13.8 Years

EaseMyTrip

Average Time Taken By An Indian Startup To IPO

Witnessed The Highest YoY Jump Between Q2 FY21 And Q2 FY22

Note: ROAS refers to return on advertisement spent © Inc42 Media | Not for Distribution

3

India’s 2021 Tech Startup IPOs See Mixed Results IPO Date

Valuation Sought In IPO

Total IPO Subscriptions (Times)

March 2021

$275 Mn

159.33

$760 Mn

March 2021

$460 Mn

175.46

$950 Mn

July 2021

$10 Bn

38.25

$15 Bn

August 2021

$1 Bn

20.29

$700 Mn

September 2021

$9 Bn

57.66

$7.6 Bn

Oct-Nov 2021

$7.4 Bn

81.78

$13 Bn

Oct-Nov 2021

$500 Mn

2.03

$450 Mn

November 2021

$6.1 Bn

16.59

$7 Bn

November 2021

$19 Bn

1.89

$14 Bn

December 2021

$600 Mn

16.17*

NA

December 2021

$800 Mn

1.55*

NA

*RateGain; MapmyIndia IPO subscription ongoing; figures are for subscriptions as of 3:30 PM, December 9, 2021

Current Valuation

© Inc42 Media | Not for Distribution

4

Anchor Rounds Raised By Indian Startups Stock

Funds Raised ($ Mn)

Notable Investors

1,122 572 350 326

New World Fund

Emerging Markets Growth Fund

123 36 31 29 Source: Inc42 Plus, Multiple Secondary Sources

© Inc42 Media | Not for Distribution

5

Total Money Raised By Indian Startups Through IPOs Stock

Total Money Raised Through IPO ($ Mn)

Source: Inc42 Plus, Multiple Secondary Sources

IPO Date

2,493

18-Nov-2021

1,277

14-Jul-2021

766

15-Nov-2021

729

10-Nov-2021

409

20-Aug-2021

79

17-Mar-2021

69

8-Mar-2021

65

24-June-2019 © Inc42 Media | Not for Distribution

6

A Landscape: Quarterly Financial Performance Of New-Age Tech Companies Last Traded Price (INR)

891

546.5

7,294

2,339

2,156

145.8

Market Capitalisation

$565 Mn

$801 Mn

$3.01 Bn

$1.03 Bn

$14 Bn

$15 Bn

Price-To-Sales Ratio

18.8

50.9

33.8

15.1

40.7

54.9

Volatility (Beta)

0.34

0.041

1.25

0.71

N/A

1.3

YoY Quarterly Growth In Revenue

35%

4.2x

12%

18%

47%

2.4x

YoY Quarterly Growth In Expenditure

124%

1.8x

19%

23%

2.8x

2.3x

Source: Inc42 Plus, Company Filings Note: Consolidated earnings of the companies have been considered for this analysis. LTP and market cap data as of December 9, 2021 © Inc42 Media | Not for Distribution

7

Return On Ad Spend (ROAS) Of Listed Startups Company

FY21 Sales ($ Mn)

FY21 Ad Spend ($ Mn)

ROAS (FY21)

272

72

4

333

23

14

91

0.295

309

62

31

2

15

2

7

34

2

19

Source: Inc42 Plus, Company Filings Note: INR to USD exchange rate is 73.4.

© Inc42 Media | Not for Distribution

8

Zomato’s Delectable Performance

Zomato: Quarterly Financial Performance In July-Sept 2021

LTP (INR)

145.8

Market Capitalisation

$15 Bn

Price-To-Sales Ratio

54.9

Volatility (Beta)

1.3

YoY Quarterly Growth In Revenue

2.4x

YoY Quarterly Growth In Expenditure

2.3x

Piotroski F-Score (0 to 9)

2

Among all new-age Indian startups, Zomato has the highest market capitalisation of $15 Bn, followed by Nykaa’s $13.5 Bn and Freshworks’ $10 Bn.

Zomato is venturing into the fast-growing quick-commerce space (rapid hyperlocal deliveries of staples and other daily essentials).

The company made substantial investments in Magicpin, a hyperlocal deal discovery app, and Shiprocket, a logistics tech firm.

It is also likely to invest $500 Mn in Grofers.

As of September 2021, the company had 15.5 Mn average transacting users, a 2.6x surge compared to the previous year. The rise in this number can be attributed to increased expenditure on marketing and promotional activities and post-pandemic business recovery.

Source: Inc42 Plus, Company Filings Note: Consolidated earnings of the companies have been considered for this analysis. LTP. Market cap data as of December 9th, 2021 © Inc42 Media | Not for Distribution 10

Zomato’s Stock Price Performance Since IPO

Source: TradingView, Inc42 Plus

© Inc42 Media | Not for Distribution 11

Upward Trend Evident In Zomato’s Sales Growth In The Past Quarters

Zomato’s Expenditure Is Growing Faster Than Sales

+141%

150

250

+183%

100

Total Expenditure

Operating Revenue ($ Mn)

200

50

150

100

50

0

Sep 2020

Jun 2021

Sep 2021

Zomato recorded QoQ growth of 22% and YoY quarterly growth of 141%

0

Sep 2020

Jun 2021

Sep 2021

QoQ rise in expenditure was 28% and YoY quarterly rise was 183%

Source: Company Filling, Inc42 Plus © Inc42 Media | Not for Distribution 12

Zomato’s Monthly Transacting Users Are Growing At An Quarterly Average Rate Of 27% 20 Average Monthly Transacting Users (Mn)

27%

15

10

5

0

Q2FY21

Q3FY21

Q4FY21

Q1FY22

Q2FY22

Source: Inc42 Plus, Company Filings © Inc42 Media | Not for Distribution 13

Zomato: Strong Points Growing Number Of Transacting Users With the internet and smartphones making a foray into the country, more than 60% of the population is online and counting. Research by Inc42 Plus also finds that India is home to approximately 348 Mn online transacting users, the primary adopters of the country’s consumer internet products and services. As of Q2 FY22, Zomato recorded an average of 15.5 Mn monthly transacting users, growing at 27% QoQ (Q2FY21 to Q2FY22).

Growing Number Of Merchants On The Platform Besides its retail consumers, the merchant ecosystem is another critical customer segment for Zomato. In Q2 FY22, the company recorded a merchant base of 173K active food-delivery restaurants, a YoY rise of 71% compared to Q1 FY22.

Exponential Growth In Quarterly Sales Compared to Q2 FY21, the quarterly sales of Zomato grew 2.4x YoY, from $58 Mn to $140 Mn. This can be attributed to the organisation's branding and promotional activities to capitalise on the pent-up Covid-19 demand among millennials and Gen Z. This growth was further driven by large-scale adoption of hyperlocal food delivery startups in India as their target audience continues to grow.

Superior Market Capitalisation Among the new-age Indian startups listed in the public market, Zomato has the highest market cap of around $15 Bn compared to other listed startups such as Nykaa ($14 Bn) and Paytm ($12.3 Bn). A higher market cap indicates superior investor confidence towards tradable security.

© Inc42 Media | Not for Distribution 14

Zomato: Key Concerns Strong Competitor Zomato’s arch-rival Swiggy recorded a total sales (operating revenue) of $343 Mn in FY20, growing at an average annual rate (FY18-FY20) of 147% compared to Zomato’s 140%. If we compare the two companies’ return on advertising spend (ROAS FY20), Zomato earned $1.9 for every marketing dollar spent, while Swiggy earned $2.43 for every ad dollar. With both companies trying to become the first mover at scale, the growing competition may soon hurt the financial efficiency of Zomato..

Regulatory Intervention & Threat Of New Entrant Vexed regulatory issues related to consumer internet product/s and/or service/s are uncertain and may easily hamper sustainable business planning by any tech startup operating in India. Be it a likely ban on cryptocurrencies or the introduction of the e-pharmacy Bill, when the government abruptly introduces a new law or modifies an existing one, the venture capital ecosystem in India reacts negatively due to a lack of clarity.

Ad Dependency To Drive Sales Zomato’s operating revenue in Q2 FY22 increased 141% YoY, from $58 Mn (September 2020) to $140 Mn (September 2021). Similarly, the average monthly transacting users (AMTU) increased 2.6x, from 6 Mn in Q2 FY21 to 15.5 Mn in Q2 FY22. The company has attributed the growth in sales and number of transacting users to the increase in advertising and marketing spend. Indicating high dependency on advertising to drive sales for the company.

© Inc42 Media | Not for Distribution 15

All About Nykaa’s Performance Makeover In Q3 2021

Nykaa: Quarterly Financial Performance In July-Sept. 2021

LTP (INR)

2,156

Market Capitalisation

$14 Bn

Price-To-Sales Ratio

40.7

Volatility (Beta)

N/A

YoY Quarterly Growth In Revenue

47%

YoY Quarterly Growth In Expenditure

56%

Piotroski F-Score (0 to 9)

6

Key Acquisitions In 2021: Nykaa acquired Pipa.Bella (Fashion Brand) and Dot & Key Wellness (Beauty & Personal Care Brand) to expand its private label portfolio this year. A KPMG report states that online retailers can double their profit margins through private label products. Private labels also help boost repeat purchases and customer loyalty.

Powerful Influencer Marketing: A strong influencer marketing network (1,363+) is another plus. Research by Google on Indian beauty and personal care (BPC) consumers concluded that 81% of the BPC consumers in India have engaged with at least one beauty influencer on YouTube. This underlines the importance of influencer marketing in the journey of a potential buyer.

Source: Inc42 Plus, Company Filings Note: Consolidated earnings of the companies have been considered for this analysis. LTP & Market Cap. data as of 9 December 2021 © Inc42 Media | Not for Distribution 17

Nykaa’s Stock Price Performance Since Its IPO

Source: TradingView, Inc42 Plus

© Inc42 Media | Not for Distribution 18

Nykaa’s Quarterly Sales Witnessed 47% YoY Jump In Q2 FY22

Nykaa’s Quarterly Expenditure Increased 56% YoY In Q2 FY22

+47%

125

100

100 Total Expenditure ($ Mn)

Operating Revenue ($ Mn)

+56%

125

75

50

75

50

25

25

0

0

Sep 2020

Jun 2021

Sep 2021

Gross profit margin in September 2021 was 43% compared to 39.3% in the previous year

Sep 2020

Jun 2021

Sep 2021

Cost of goods sold (COGS) increased 38% YoY in Q2 FY22

Source: Company Filling, Inc42 Plus © Inc42 Media | Not for Distribution 19

Nykaa’s Order Volume Surged 61% Year On Year In Q2 FY22 The number of orders across the beauty and personal care segment surged 53%, while the same in the fashion sector more than doubled to 117% 8

7.1

7.4

Number Of Orders (Mn)

6

4.6 4

2

0

Sep 2020

Jun 2021 Fashion

Sep 2021

Beauty & Personal Care

Source: Inc42 Plus, Company Filings © Inc42 Media | Not for Distribution 20

Nykaa: Strong Points Superior Market Share Nykaa’s market share in the online beauty and personal care space is estimated to be more than 18.5% (calculated as revenue of FY20/TAM). It is the single largest share by a new-age startup, while other competitors, including Purplle, Pureplay, MyGlamm, Mamaearth and SUGAR, hold less than 2% of the addressable market.

Customer Loyalty The percentage of existing customers in the company's total annual gross merchandise value (GMV) portrays high customer loyalty towards the brand. This surged 15%, from 55% in FY19 to 70% in FY21. Sustainable customer loyalty in a competitive market will enable the company to enjoy a larger market share and maintain a healthy operating profit margin.

Influencer Marketing Network Millennials and Generation Z customers, who are the primary target audience of Nykaa and other online beauty and personal care retailers, are digital natives with a habit of making informed purchase decisions by reading or watching online blogs/vlogs. With a network of 1,363 influencers as of March 31, 2021, Nykaa has the largest influencer network in India's online beauty and personal care sector.

Online-Offline Ecosystem Nykaa is successfully leveraging the online-offline hybrid ecosystem to grow its sales. Despite India's rising consumer internet utilities, the offline beauty and personal care segment is expected to command 82% of the total revenue share. Therefore, the company's expansion into offline retail is a positive indicator of long-term sustainability when it comes to revenue and market share. Its offline stores also help Nykaa fulfil last-mile delivery of local online orders, a smart way of expanding its reach beyond Tier 1 cities.

© Inc42 Media | Not for Distribution 21

Nykaa: Key Concerns Growing Competition India's beauty and personal care market is growing at a 50% CAGR (2015-2025). Its total revenue potential by 2025 is estimated to be $30 Bn, out of which 18% ($5.4 Bn) will be from the online segment. But for Nykaa, the race for the top slot may not be limited to other digital-native rivals like SUGAR Cosmetics, Purplle or MyGlamm. It may soon involve stiff competition from ecommerce giants like Amazon and Flipkart that consider BPC as an emerging segment within online retail.

It is also important to note that Indian conglomerates like Reliance and the Tata group are already working towards the country's first super-app. Both are deep-pocketed enterprises with lasting brand value, posing a significant threat to independent consumer internet startups.

User Data Security Today, the advantages of technology are at their peak, and so are the risks of cyberattacks. The Indian Computer Emergency Response Team (CERT-In) report says that the number of cybersecurity incidents handled by the agency surged 23x, from 49.4K in 2015 to 1.2 Mn in 2020. Therefore, data security and privacy have become crucial for internet users in India. A survey by McAfee also stated that 78% of the Indian respondents were concerned about their financial data getting stolen, indicating that such an incident could result in a serious churn rate among active users.

Changing Regulation From seed funding slowdown due to angel tax implications to dwindling investor confidence due to a lack of clarity regarding the e-pharmacy Bill, abrupt regulatory changes by the Indian government have always affected the country's startups. Stringent laws, including the Consumer Protection (E-Commerce) Rules (2020), the Cosmetic Rules (2020) and the Legal Metrology (Packaged Commodities) Rules (2011), are some of the critical changes that come with ambiguities and hinder efficient business planning. Furthermore, these rules will also increase the operational costs of online marketplaces in India.

© Inc42 Media | Not for Distribution 22

How IndiaMART Fared In Q3 2021

IndiaMART: Quarterly Financial Performance In July-Sept. 2021

LTP (INR)

7,294

Market Capitalisation

$3.01 Bn

Price-To-Sales Ratio

33.8

Volatility (Beta)

1.25

YoY Quarterly Growth In Revenue

12%

YoY Quarterly Growth In Expenditure

19%

Piotroski F-Score (0 to 9)

6

In 2021, the company acquired as many as 6 companies/startups to expand its B2B classified portfolio. The company also added a SaaS (vendor management software for B2B) product to the platform.

IndiaMART commands 60% of the B2B ecommerce classified market in the country. Even in subscription-based online B2B business, the company holds 55% market share, while its closest competitor TradeIndia holds only 35%.

Regulatory changes in ecommerce business operations and user data security are two major threats for the long term business sustainability of the company.

Source: Inc42 Plus, Company Filings Note: Consolidated earnings of the companies have been considered for this analysis. LTP & Market Cap. data as of 9 December 2021 © Inc42 Media | Not for Distribution 24

IndiaMART’s Stock Price Performance Since Its IPO

Source: TradingView, Inc42 Plus

© Inc42 Media | Not for Distribution 25

IndiaMART’s Quarterly Sales Saw 12% YoY Jump

IndiaMART’s Expenditure Increased 23% YoY Increase

+12%

25.0

15.0

+23%

Total Expenditure ($ Mn)

Operating Revenue ($ Mn)

20.0

15.0

10.0

10.0

5.0

5.0

0.0

Sep 2020

Jun 2021

Sep 2021

Operating profit margin (OPM) fell from 50% in September 2020 to 45% in September 2021, a 5% dip

0.0

Sep 2020

Jun 2021

Sep 2021

Operating profit dipped 7% from $12 Mn in June 2021 to $11.03 Mn in Sept. 2021

Source: Inc42 Plus, Company Filings © Inc42 Media | Not for Distribution 26

IndiaMART's Revenue Per Paying Subscriber Is Growing At 8% CAGR +8%

Annual Revenue Per Paying Subscriber

$600

$400

$200

$0

2017

2018

2019

2020

2021

Financial Year

© Inc42 Media | Not for Distribution 27

IndiaMART: Strong Points Market Leadership With over 119 Mn registered users/buyers on the platform, IndiaMart commands 60% of the total B2B ecommerce classified space. Even in the subscription based online B2B business the company holds a majority position with 55% market share, its closest competitor TradeIndia commands only 35%.

Financial Efficiency Over the past year, IndiaMart’s operating profit margin (OPM) has remained in the rage of 45% to 50%. Since December 2018, the company has not reported operating loss even in a single quarter. During the pandemic year (FY21) the company reported the highest sales ($91.3 Mn), operating profit ($44 Mn) and operating profit margin (49%) in the past seven years.

Product Portfolio Expansion In 2021, the company has acquired approximately 6 companies/startups to expand its current B2B classified portfolio as well as adding a new SaaS product to the platform. In addition to the addition of new products in the portfolio the company has also expanded its sales channels to include online sales and direct selling agents (DSA)

Positive Future Growing In Paying Subscribers (Suppliers) In FY21 the company had a total of 152K paid subscribers (suppliers) on its platform. The number of subscribers is estimated to increase to 252K in FY24, a 66% increase compared to the current number. The growing number of paid supplier subscribers can be attributed to the large scale adoption of digital channels in Indian SMB operation post-pandemic.

© Inc42 Media | Not for Distribution 28

IndiaMART: Key Concerns User Data Security Today the utility of technology is at its peak in India and so is the risk of cyber attacks. As per a report by the Indian Computer Emergency Response Team (CERT-In), the number of cyber security security Incidents handled by the organisation has surged 23x from 49.4K (2015) to 1.2 Mn (2020). As a result, data security and privacy has become of utmost importance for the Indian internet users, a survey conducted by McAfee Corporation highlighted— 78% of surveyed Indian internet users were concerned about their financial data being stolen such as credit card information, debit card details, etc. Indicating a cybersecurity incident involving the same could result in a serious churn rate of active users.

Changing Regulations From the slowdown in seed stage funding due to implications of angel tax to decreased investor confidence towards epharmacy startups during the introduction of epharmacy bill. Historically the abrupt regulations changes by the Indian government has adversely affected the Indian startups. Regulation such as Consumer Protection (E-Commerce) Rules, 2020, Cosmetic Rules, 2020 and Legal Metrology (Packaged Commodities) Rules, 2011 are some of the key regulation which are still unclear form a cloud of ambiguity for efficient business planning. Furthermore these regulation will also increase the cost of operation for online marketplace in India.

© Inc42 Media | Not for Distribution 29

Nazara’s Cutting-Edge Performance

Nazara: Quarterly Financial Performance In July-Sept. 2021

LTP (INR)

2,339

Market Capitalisation

$1.03 Bn

Price-To-Sales Ratio

15.1

Volatility (Beta)

0.71

YoY Quarterly Growth In Revenue

19%

YoY Quarterly Growth In Expenditure

22%

Piotroski F-Score (0 to 9)

7

Nazara technologies has made two acquisitions in 2021. OnePlay (a skill gaming startup) and Turkey based gaming marketing agency PublishMe. The acquisition of OnePlay will further solidify the gamified early learning offering of the company. In FY21, gamified early learning was the top revenue generating segment making 39% of the total sales that year.

The return-on-ad-spend (ROAS) of the company has increased 7.5%.

In FY21 the ROAS of the company was 2.0, which means for every dollar spent on advertising in the financial year 2021 the company earned $2.

Regulatory concerns over real money gaming and the growing competition in early learning edtech market are two major threats for the long term business sustainability of the company.

Source: Inc42 Plus, Company Filings Note: Consolidated earnings of the companies have been considered for this analysis. LTP & Market Cap. data as of 9 December 2021 © Inc42 Media | Not for Distribution 31

Nazara Technologies Stock Price Since Its IPO

Source: TradingView, Inc42 Plus

© Inc42 Media | Not for Distribution 32

Nazara’s Quarterly Sales Record 19% YoY Jump

Nazara’s Quarterly Expenditure Jumps 22% YoY

+19%

20

20

+22%

Total Expenditure ($ Mn)

Operating Revenue ($ Mn)

15

10

5

0

Sep 2020

Jun 2021

Sep 2021

Revenue from the eSports segment recorded the highest YoY growth at 34%, from $5.05 Mn in Sept. 2020 to $6.8 Mn in Sept. 2021.

15

10

5

0

Sep 2020

Jun 2021

Sep 2021

Advertising expenditure accounted for 46% of the total quarterly expense, $7 Mn out of $15.1 Mn, in Sept. 2021

Source: Company Filling, Inc42 Plus © Inc42 Media | Not for Distribution 33

Gamified Early Learning Segment Recorded Highest Revenue For Nazara In The First Half Of FY22 Kiddopia, the company’s early learning app, had 3.2 Lakh paid subscribers as of Q2 FY22

Real Money Gaming 2.8% Freemium 3.7% Telco Subscription 13.3%

eSports 39.6%

0.994

14.4

1.3

4.7

Gamified Early

$36 Mn

40.7%

Operating Revenue (H1FY22)

14

Source: Inc42 Plus, Company Filings © Inc42 Media | Not for Distribution 34

Nazara: Strong Points Exponential Growth In Sales In India, the Covid-19 pandemic catalysed the engagement and consumption of online games in the country. Total 7.3 Bn games where installed in the first three quarters of 2020, accounting for 17% of the global downloads during the same period. Furthermore gamification of K12 education is also picking up in India.

Overall the gaming industry in India is on a growth trajectory at the moment and the same was reflected on the financial statement of Nazara Technologies. The annual sales of the company surged 83% in FY21 to $62 Mn from $34 Mn (in FY20), this is the highest sales recorded by the company in the last six years.

Growing Addressable Market Nazara Technologies has significant presence across leading online gaming verticals which include — gamified K12 learnings, freemium games, skill based real money games and esports. With the growing internet & smartphone penetration in the country the addressable market for online games is poised to increase. As of 2020, the smartphone penetration in the country was 78% as is expected to increase to 90% by 2023. As of 2020, India was home to approximately 80 Mn paid gamers the number is expected to increase to 235 Mn by 2025.

Sound Financial Performance For the past five quarters the company has remained operationally profitable. With the operating profit margin raging between 7% to 19%. The company was also operationally profitable with $5.3 Mn in FY21 as opposed to $954K operating loss in the previous year. Also the return-on-ad-spend (ROAS) of the company has increased 7.5%. In FY21 the ROAS of the company was 2.0, which means for every dollar spent on advertising in the financial year 2021 the company earned $2.

Notable Investors' Backing The fact that Nazara is the first listed Indian gaming company, the company is backed by the likes of notable public market investors (such as Rakesh Jhunjhunwala, Plutus Wealth) and mutual funds (BNP Paribas India Consumption Fund, Union Smallcap Fund, Baroda Dynamic Equity Fund and others).

© Inc42 Media | Not for Distribution 35

Nazara: Key Concerns Expenditure Growing Faster Than Revenue Although the company remains operationally profitable in FY21 and the for the past five financial quarters. The five year compounded annual growth rate (CAGR) of expenditure (25%) is higher than the CAGR of sales (17%). The impact of the same is evident on the operating profit margin of the company which in FY21 (9%) was one fourth of the OPM in FY16 (36%).

Growing Competition In Gamified Early Learning In FY21 the gamified early learning division of the company accounted for 39% ($24 Mn out of the total $62 Mn). Although gamification of learning module for children is an emerging segment in the overall Indian edtech market, big time edtech players (Unacademy, Vedantu) in India including the market leader BYJU’s is bullish on this segment along with numerous early stage startups mushrooming. The fact that Nazara’s gamified early learning solution is also a B2C product, over dependence on this segment can hamper the company’s sales growth in the long run.

Regulatory Concerns Over Real Money Gaming Fantasy sports is one of the biggest driver of real money gaming trend in India. Recently there is a growing cloud of uncertainty over the legality and regulation of this business in India. The debate over official classification of chance and skill based games continue to unfold without any conclusive evidence. Although real money gaming has the lowest share in the overall sales of Nazara technologies the number of fantasy sports users in India was recorded at 100 Mn a 50x surge compared to 2016.

© Inc42 Media | Not for Distribution 36

EaseMyTrip’s Performance Soars In Q3 2021

EaseMyTrip: Quarterly Financial Performance In July-Sept. 2021

LTP (INR)

546.5

Market Capitalisation

$801 Mn

Price-To-Sales Ratio

50.9

Volatility (Beta)

0.041

YoY Quarterly Growth In Revenue

4.2x

YoY Quarterly Growth In Expenditure

1.8x

Piotroski F-Score (0 to 9)

8

EaseMyTrip has acquired Spree Hospitality and Traviate. The acquisition of these two startups will expand the company’s footprint in hotel & hospitality segment and B2B travel marketplace respectively.

The company recorded exponential year-on-year growth in quarterly sales. In Q2 FY22, EaseMyTrip recorded a total sales of $5.9 Mn a 4.2x increase compared to $1.4 Mn the previous year.

Dependency on discounts and the omnivore variant uncertainty are two major short term threats to the business of EaseMyTrip in the coming financial year.

Source: Inc42 Plus, Company Filings Note: Consolidated earnings of the companies have been considered for this analysis. LTP & Market Cap. data as of 9 December 2021 © Inc42 Media | Not for Distribution 38

EaseMyTrip’s Stock Price Since Its IPO

Source: TradingView, Inc42 Plus

© Inc42 Media | Not for Distribution 39

EaseMyTrip’s Quarterly Sales Saw 4.2x Jump Year On Year

EaseMyTrip’s Quarterly Expenditure Surged 1.8x Year On Year

+4.2x

6

4

+1.8x

Total Expenditure ($ Mn)

Operating Revenue ($ Mn)

3 4

2

0

Sep 2020

Jun 2021

Sep 2021

Gross profit margin during July-Sept. 2021 was 43% compared to 39.3% in the previous year

2

1

0

Sep 2020

Jun 2021

Sep 2021

Cost of goods sold (COGS) increased 38% YoY in Q2 FY22

Source: Company Filling, Inc42 Plus © Inc42 Media | Not for Distribution 40

EaseMyTrip's Advertising & Sales Promotion Expenditure Tripled In Q2 FY22 The growing expenditure towards advertising and sales promotion indicates an increased focus on sales and customer acquisition in the post-pandemic times +3.04x

Advertising & Sales Promotion ($ Mn)

1.25

1.00

0.75

0.50

0.25

0.00

Sep 2020

Jun 2021

Sep 2021 © Inc42 Media | Not for Distribution 41

EaseMyTrip: Strong Points Strong Sales Recovery In Q2FY22 Post pandemic the pent-up demand for travel and tourism is on the rise. The impact of the same is evident on the quarterly sales growth of the company. In Q2 FY22, EaseMyTrip recorded a total sales of $5.9 Mn a 4.2x increase compared to $1.4 Mn the previous year. The company recorded an operating profit margin (OPM) of 28% in Q2FY22 as opposed to -28% in Q2FY21.

High Customer Stickiness The “lean cost” and “no convenience fee strategy” adopted by the company has lead to a repeat transaction rate of 86% among the B2C channels. As travel becomes the new-norm again in a post-pandemic world, customer loyalty can help the company to generate long term sustainable sales in the near future. Backing on the customer stickiness and company’s product portfolio expansion EaseMyTrips gross operating income is estimated to reach $73 Mn growing at a compounded annual growth rate (FY21 to FY24) of 39%.

Product Portfolio Expansion Although air ticket booking remains the highest revenue generating segment for the company, the segment made 98% of the total revenue of the company in FY21.

EasMyTrip has expanded its product offering to include comprehensive travel packages and end-to-end travel solutions. Growing number of revenue channels will help increase the top line revenue of the business in the coming years.

Growing Domestic Air Travellers The total number of domestic air travellers in India was 45 Mn in FY10, over the decade the number has increased three-fold (3x) to 141 Mn in FY20. The number in next two decade (i.e FY40) is estimated to reach 906 Mn. Higher customer loyalty and bigger product portfolio will help the company to generate greater user engagement and conversion. The growing per capita income of Indians and growing popularity of low-cost airlines are two major drivers of the growing domestic air travellers in India. © Inc42 Media | Not for Distribution 42

EaseMyTrip: Key Concerns Lower Market Share Based on the aggregate gross booking revenue, in FY20 the company had a market share of 6% lower than its competitors— MakeMyTrip (48%) and Yatra (9%).

In the airline ticket booking market the company has a market share of 19% as opposed to MakeMyTrip (51%). Expansion of its product portfolio towards hotel and B2B travel solutions can help the company command higher market share in the overall online travel market.

Growing Discounts Although there is huge pent-up demand for travel and tourism in the country in the post-pandemic world, the aggressive customer acquisition strategy is no-less.

Advertising/discounts/cashbacks play an important role achieving superior customer acquisition in the Indian OTA market. In Q2 FY22, the advertising spend of the company surged 3x from $372K (Q2 FY21) to $1.1 Mn (Q2 FY22).

Covid-19 Uncertainty To a great extent the Indian economy has opened up to the old-normal. However, with rising discovery of new variants (e.g. omnivore, delta and others) the uncertainty in the context of a new pandemic remains intact.

© Inc42 Media | Not for Distribution 43

CarTrade On The Right Track?

CarTrade: Quarterly Financial Performance In July-Sept. 2021

LTP (INR)

891

Market Capitalisation

$565 Mn

Price-To-Sales Ratio

18.8

Volatility (Beta)

0.34

YoY Quarterly Growth In Revenue

37%

YoY Quarterly Growth In Expenditure

136%

Piotroski F-Score (0 to 9)

5

CarTrade has remained operationally profitable for the past three financial years — FY19 to FY21 and is also the only profitable player in the online automobile portal market.

A survey of new-used cars buyers in India (2020) concluded that over 92% of new and used cars buyers in India research about the vehicle online before making a purchase.

The issue price of the CarTrade IPO was between INR (1,585 to 1,618), as of 6 December 2021 the last traded price of the CarTrade stock was— INR 892.4, 45% lower than the upper end of the issue price.

Source: Inc42 Plus, Company Filings Note: Consolidated earnings of the companies have been considered for this analysis. LTP & Market Cap. data as of 9 December 2021 © Inc42 Media | Not for Distribution 45

CarTrade’s Stock Price Since Its IPO

Source: TradingView, Inc42 Plus

© Inc42 Media | Not for Distribution 46

CarTrade's Sales In Q2 FY22 Were 37% Higher Than The Previous Year 12.0

CarTrade's Quarterly Expenditure In Q2 FY22 Was 42% Higher Than Sales 20

+37%

+136%

Total Expenditure ($ Mn)

Operating Revenue ($ Mn)

10.0 8.0 6.0 4.0

15

10

5

2.0 0.0

Sep 2020

Jun 2021

Sep 2021

Growing expenditure skimmed the company’s operating profit from $1.4 Mn in Q2 FY21 to -$4.5 Mn in Q2 FY22

0

Sep 2020

Jun 2021

Sep 2021

Employee benefit expenditure surged nearly threefold, from $4 Mn in Q2 FY21 to $11.3 Mn in Q2 FY22

Source: Inc42 Plus, Company Filings © Inc42 Media | Not for Distribution 47

Monthly Unique Visitors & Auto Listing On CarTradeIs Growing On An Annual Average Growth Rate Of 16%& 7% Respectively 1000

750 20 500 10 250

0

2019

2020

2021

Number Of Vehicles Listed (000)

Average Monthly Unique Visitors (Mn)

30

0

Financial Year Average Monthly Unique Visitors (Mn)

Number Of Vehicles Listed (000)

Source: HDFC Securities, Inc42 Plus © Inc42 Media | Not for Distribution 48

CarTrade: Strong Points Growing Used Car Market In India the number of used cars sold annually is higher than new cars. In the financial year 2020, approximately 4.4 Mn used cars were sold in India. The number is estimated to reach 8.3 Mn in the financial year 2026. Similarly the number of pre-owned 2W sold in FY20 was 20 Mn, the number is estimated to be 30 Mn by the financial year 2026.

Increasing Digital Footprint In Automobile Purchase Process With the growing penetration of smartphone and internet subscription in India, there is an upsurge in the use of online automobile portals in the customer purchase journey. A survey of new-used cars buyers in India concluded that over 92% of new and used cars buyers in India research about the vehicle online before making a purchase.

Regulatory Support The automobile industry around the world is transitioning from being internal combustion engine to electric. For the same the Government of India (GoI) has formulated regulations to help both the consumers (The FAME India Schemes) and the manufacturers (Upto 100% FDI and full delicensing for EVs). In addition to this, to reduce the number of outdated/old vehicles on the road the Indian government is subsidising the scrappage of vehicles older than 15 years.

© Inc42 Media | Not for Distribution 49

CarTrade: Key Concerns Stock Price Tumbling SInce Its Listing The issue price of the CarTrade IPO was between INR (1,585 to 1,618), as of 6 December 2021 the last traded price of the CarTrade stock was— INR 892.4, 45% lower than the upper end of the issue price. The downward trend on the company’s stock is largely attributed to over valuation of the stock price and the growing competition in the market which has low entry barriers.

Growing Expenditure Although the company has consistently reported operating profit for the past three financial years (from FY19 to FY21). The year-on-year growth of Q2 FY22 expenditure compared to Q2 FY21 was 136% from $6.4 Mn (Q2 FY21) to $15.1 Mn (Q2 FY22). As opposed to the exponential growth in expenditure the sales increased a modest 37%. The same is reflected on the company’s quarterly results for FY22, where for both Q1 & Q2 FY22 the company has reported operating loss.

Competitive Market The online automobile portal market in India already has the presence of dominant players such as Cars24 and CarDekho both these companies have higher venture capital funding as well as revenue compared to CarTrade. With low entry barriers and OEMs also launching their own online portals to research and purchase automobiles online the degree of competition in the market is poised to increase in the long run, as a result hindering the sustainability of adequate operating profit margins.

© Inc42 Media | Not for Distribution 50

The State Of New-Age Indian Tech IPOs 16+ Upcoming Indian Startup IPOs

$56 Bn Combined Market Capitalisation Of New Age Publicly Traded Tech Comapnies

8 out of 9 Listed New Age Indian Startups Were Listed In 2021

13.8 Years Average Time Taken For Indian Startup To IPO

9 Listed New Age Indian Startups In 2020 & 2021

Zomato Has The Highest Market Cap. Among Listed Indian Startups © Inc42 Media | Not for Distribution 51

Indian Tech IPOs Coming In 2022 Expected IPO Date

Status

Current Valuation

Valuation Sought In IPO

Q1 2022

DRHP Filed

$3 Bn

$4.5 Bn - $5 Bn

Q1 2022

DRHP Filed

$600 Mn

$850 Mn

Q1 2022

DRHP Filed

$9.6 Bn

$12 Bn

Q1 2022

DRHP Filed

$1.2 Bn

NA

Q1 2022

SEBI Approval Received

$1 Bn

$1.5 Bn - $1.7 Bn

Q1 2022

DRHP Filed

$5.6 Bn

$7 Bn

Q1 2022

Converted To Public Company

$750 Mn

$1.5 Bn - $1.8 Bn

Q1 2022

In Talks With Bankers

$650 Mn

NA

© Inc42 Media | Not for Distribution 52

Expected IPO Date

Status

Current Valuation

Valuation Sought In IPO

Q1 2022

Converted To Public Company

$1 Bn

$1.5 Bn - $2.5 Bn

Q2 2022

DRHP Filed

$78 Mn

NA

Q2 2022

Converted To Public Company

Q2 2022

In Talks With Bankers

$7.3 Bn

$12 Bn - $14 Bn

Q2 2022

In Talks With Bankers

$18 Bn

$40 Bn - $50 Bn

Q3 2022

In Talks With Bankers

$3.5 Bn

$6 Bn

Q4 2022

Early Stages

$38 Bn

$50 Bn

Q4 2022

Early Stages

$10.5 Bn

NA

NA

IPOs Expected In 2023 Source: Media Reports, DRHP filings; Regulatory filings

© Inc42 Media | Not for Distribution 53

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