‘What really matters is the long-term cash flow generation potential and the present value of those cash flows’

India has witnessed the emergence of private capital which now outstrips public capital. Lack of access to capital, is no longer a concern for entrepreneurs. Great ideas today are backed by venture capitalists and angel investors. What many believe is the next decade belongs to India. If this holds true, then what are some of the themes which are going to be important?

To answer this question, Cafemutual hosted Prateek Pant, CBO, White Oak Capital Management who shared with attendees his views on the market trends.

There is disruption across industries leading to some amazing innovations. In fact, the number of unicorns created in 2021 exceeds the total number of unicorns created in the last decade. Besides, India overtook the UK last year to be the third-largest country for unicorns. While there is some slowdown in the private market, it is fairly vibrant and deals are getting announced on daily basis. In fact, we are only in the year start and Feb 2022 alone has registered 10 unicorns. This trend is here to stay.

Commenting on the business cycle, Prateek said, different companies are at different levels. Just because a company is profitable does not necessarily mean that it will be the winner of tomorrow. And, just because a company is not profitable does not mean it is worthless. What really matters is the long-term cash flow generation potential and the present value of those cash flows.  

Prateek believes, leveraging technology to reach out to the masses is here to stay. Not being a part of this would lead to redundancy. MFDs/RIAs must find a way to start working in this ecosystem and to see how can they benefit from it. 

He concluded his session by quoting Peter Theil who has written the book titled ‘Zero to One’ – “Zero to one every moment in business happens only once. The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.”