New-Age Tech Companies Expected to Comprise 8-10% of India's Listed Market Capitalisation by 2033

On Friday, Kunal Bahl, Co-Founder of AceVector and Titan Capital, forecasted a significant shift in India's startup landscape. He suggested that within the next decade, new-age tech firms could comprise 8-10% of India's total listed market capitalisation. Currently, these companies represent only about 2.5% of the market cap. Bahl shared these insights at the ET Now Global Business Summit.

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Bahl highlighted that India's economy is undergoing formalisation and digitisation, paving the way for tech companies to expand significantly. He compared this to the US, where new-age tech companies make up about 25% of the listed market cap. In India, out of a USD 5 trillion economy, only USD 150 billion is attributed to these tech firms.

Growth Potential for Indian Tech Companies

As India's total market cap is projected to grow to USD 15 trillion over the next decade, Bahl envisions new-age tech companies capturing 8-10% of this value. This growth could potentially create over USD 1 trillion in value. The potential for Indian tech firms is vast, with many poised to list on the stock market in the coming years.

Bahl identified three major factors driving this transformation: the formalisation of consumption through UPI and demonetisation, financialisation of small businesses, and rapid digitisation of infrastructure. These elements are accelerating the adoption of technology businesses and their products across India.

Indian Companies in Global Markets

Indian new-age companies are gaining recognition and becoming part of indices like Nifty 50. Bahl believes it's only a matter of time before more such companies emerge. He emphasised India's strength in developing solutions for less glamorous industries rather than just consumer apps.

He cited an example of an Indian startup using AI to manage complex tenders spanning thousands of pages. "Context is important, and that's where companies from India will emerge who have contextual AI apps built for the world," Bahl stated. He anticipates Indian AI application firms generating billions in revenue soon.

Challenges and Opportunities

Despite his optimism, Bahl noted a significant lack of capital and a conservative mindset among Indian business committees. He pointed out the disparity in venture funding between India (USD 10 billion) and the US (USD 300 billion). He praised the government's Rs 1 lakh crore research, development, and innovation fund but stressed that more investment is needed.

Bahl urged a change in mindset regarding risk-taking in building world-leading tech companies from India. "We need to be okay with the concept that there will be some wastage along the way," he said. He believes that valuable businesses will likely emerge at the intersection of consumption and AI over the next 15 years.

With inputs from PTI