India’s leading digital payments and financial services platform Paytm is heading for a market debut with an aim to raise $2.2 billion, which is touted to be India’s largest IPO. And the IPO is already getting the gurus in the financial services industry excited.
Damodaran teaches equity valuations at Stern, and is also referred to as the “dean of valuation”. Multiple other start-ups like Ola are also reported to be aiming for a stock market debut. On what makes a company or sector interesting, Damodaran said, “There are two things I look for sectors that are likely to be disrupted: one is how big the market is. Financial services is a huge market, automobiles is a huge market. The other thing that I look for is the existing status quo.
“One indicator that a business is going to be disrupted is if nobody’s happy - customers are not happy, companies are not happy, regulators are not happy. Let’s face it, that’s the state of the game right now in financial services. I think there are sectors where disruption is going to come simply because things are not working the way it is right now.”But if he had to choose between Paytm and Ola? “I would prefer Paytm to Ola because the ridesharing business is a complete disaster around the world. Ridesharing is one of those businesses where they have figured out how to grow but nobody seems to have figured out how to make money and it’s not just Ola, it’s Didi, Grab, Uber, Lyft,” he said.