Amid several concerns raised over the successful IPO of Zomato which has been running in losses, SEBI Chairman Ajay Tyagi on Thursday said that recent public offerings show the maturity of the Indian market that is accepting the business model of new age tech companies, which may not be valued through the conventional parameters of profitability.

Addressing NISM’s Second Annual Capital Markets Conference, he said that successful IPOs of such companies are likely to attract more funds in domestic markets, creating a new ecosystem of entrepreneurs and investors.

Noting that along with robust growth, it is heartening to note that Indian markets are entering a new era with several new age tech companies preferring to list domestically, he said: “Recent filings and public offerings reflect the maturity of our market to accept the business model of new age tech companies, which aren’t amenable to valuation through conventional metrics of profitability.”

Tyagi was of the view that markets in the country offer as attractive a fund raising proposition as any overseas market.

His statement comes at a time when several concerns have been raised over the public offerings brought about by the new age companies which have not attained profitability, but are accorded high valuations.

Last week RPG Enterprises Chairman Harsh Goenka took to Twitter to take a swipe at Zomato’s mega IPO despite the platform running into losses. His tweet led to an online debate over the issue of loss-making entities garnering such huge interest and investments while going public.

“My newest corporate venture: I am starting a Swiggy/Zomato like app. I will provide food at 40% discount with a loss of only Rs 3000 cr. If you think the loss is less, I will give 60% discount. I will then list it at Rs 1 lakh cr. Looking for suckers to invest,” Goenka had said in a tweet on July 17.

The much-anticipated initial public offering (IPO) of Zomato was subscribed over 38 times by the end of the final day of the issue on Friday.

Other tech-based new age companies are also in the fray to go public with PayTM having applied for an IPO with an aim to raise up to Rs 16,600 crore.

Tyagi also said that the maturity of the Indian IPO market and its resilience to the Covid-19 pandemic is reflected in the quantum of funds raised during FY 21 – companies raised Rs 4,600 crore through IPOs as compared to Rs 2,140 crore in FY20.

In FY 22, until June end, companies have already raised Rs 1,200 crore and from the number of new filings with the SEBI, it is expected that the figures will increase significantly going forward, he added.

On high interest among retail investors, the capital market regulator chief said that prevailing low interest rates and ample liquidity availability are not the only reasons for this increased investors interest in securities market in India, though one cannot deny that they are major factors and any tightening of liquidity or increase in interest rates would impact the market.

“However, it also needs to be acknowledged that by their very nature, the markets are forward looking and the present investments take into account future growth prospects. Add to this, the regulator’s effort in terms of continuous dialogue with stakeholders to bring in required regulatory changes, rationalising procedures and maintaining trust in the market.”