There are a few basic things private equity investors and venture capitalists keep in mind when investing in companies. Foremost among them, most will tell you, is the quality of the entrepreneurs and the teams they lead and whether the ventures are addressing a need gap in the market. Then there’s the question of whether the venture is scalable and can generate sustained profits. Evidence before us shows how tough it is for even the most seasoned investor to pick the right companies. It is in this context that this issue, which showcases a selection of what Forbes India calls Hidden Gems, becomes even more relevant.
The six companies this year have been carefully chosen after discussions with some of the most seasoned private equity and venture capital investors and then finalised from a long-list after multiple sittings, during which Forbes India
’s editors deep-dived into several aspects of their business models. This diverse set of six, then, comprises companies which, though unlisted, have disruptive business models and are making an impact in the sectors they are in, with an eye on sustained profitability. It’s not surprising, then, that they also boast of some marquee investors who unhesitatingly back them and are bullish on their growth prospects. Being unlisted and without a wide public shareholder base, they are, in a sense, ‘hidden’, but winners all the same. As Senior Associate Editor Pravin Palande, who anchored this issue, says: “For the most part, they aren’t regulars in the limelight; they prefer patient capital and a few investors who understand their business and are not in a hurry to make an exit.”
From non-banking financial company IFMR Capital, which is proving to be a crucial link for financial inclusion, to Darshan Patel’s disruptive deo maker Vini Cosmetics to Byju’s, the ed-tech firm which is making rapid strides with an exciting business model, these are companies which have dared to innovate and tread off the beaten path, making eminent business sense in the process. Investors, naturally, are pleased with what they are doing.
In tune with the broader theme of this issue, we also bring you the Forbes Asia
listing of the 200 Best Under a Billion companies; these are publicly-traded firms in the Asia Pacific region which clock sales between $5 million and $1 billion. This year’s list is overwhelmingly dominated by mainland China, Hong Kong and Taiwan, which together account for 65 percent of the members. There are 116 debutants. India, unfortunately, throws up only seven names this year, down from 35 five years ago. This issue is evidence that it’s not always the biggest that are the most exciting companies.
Editor, Forbes India
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(This story appears in the 16 September, 2016 issue of Forbes India. To visit our Archives, click here.)