India is expected to produce at least a score of billionaires and many times millionaires among the start-ups in the next five years with e-commerce, financial services and other technology driven fields generating the maximum interest, an ASSOCHAM Study on Start-Ups has pointed out.
"India will be among the top among the Asian start-ups along with the Chinese and the South East countries. However, the structural problems in China are likely to create road blocks for the start-ups there. No such issue confronts the Indian start-ups," the paper said.
It said the maximum of value creation is expected in the fledgling e-commerce, music-entertainment, payment gate-ways and city transport aggregators like radio taxis. The travel arena, especially in the ticketing and booking has already gained some level of maturity.
"Within the e-commerce, a lot more verticals well beyond groceries and fashion and electronic items like mobile phones are expected to be created.
Online food orders and cinema ticketing are already generating a good amount of volume. As the internet broad band increases in smaller cities, the trend is set to catch up in these areas".
The untapped areas for online business include e-coaching, medical consultations (with fool-proof safety features) and social networking in the cities, while in the rural landscape, the initiative is going to be led by the state sector.
"Even though there are question marks on the kind of valuations some of the start-ups command, at least in India, we do not see any bubble like situation and the interest from the angel investors is expected to continue," ASSOCHAM Secretary General Mr D S Rawat said.
According to the ASSOCHAM study, even though the market SEBI is putting a friendly regime for the start-ups to raise finance from the bourses, it would take some time before funds are raised through this channel.
"However, it would be only when at least five six large size players like Flipkart, Snapdeal come out with the IPOs the real price discovery would take place and the process of start-ups turning into billionaires and millionaires would take shape".
At the same time, there could be a high rate of mortality as well. Those, entering the business only with the idea of commanding valuations and making exits would find it difficult going forward.
"The angel investors include some of the top industry leaders like Ratan Tata, Azim Premji and N R Narayan Murthy. Their presence would certainly have a moral pressure among the entrepreneurs who would like to stay put and prove their mettle rather than make quick bucks", the paper added.
However, in the area of hardcore manufacturing, there is not much interest among the budding entrepreneurs.
On the other hand, the technology-driven solutions to help manufacturing and traditional industries are surely expected in areas like energy conservation, human resource, productivity measurement and training in soft skills.