Last month, the CEO of Google, Sundar Pichai unveiled a video, with respect to artificial intelligence, which was backed by Google Assistant.
If you haven’t watched it, watch the video here
There is something extremely interesting happening in the sector every day. We are currently amidst a digital shift and we’ve come across the humongous wealth created by Alpha (previously known as Google), Facebook, Apple, Microsoft, Amazon etc.
In India, companies like TCS (Tata Consultancy Services) have created huge wealth and TCS has recently entered the $105bn bucket.
If we look at the sector, it has garnered immense wealth over the past couple of years (see below).
In this article
How Has the Technology Sector Performed in India?
We believe that the technology sector will continue to evolve and it will offer star IPOs every few years. Some of the global IPOs will be watched closely as elucidated under. These IPOs are likely to change the nuances of the sector over time:
Recently Launched IPOs
It goes without saying that you have heard or used about Dropbox’s cloud storage.
The stock that was listed at a valuation of over USD 10 bn in March 2018 on Nasdaq, has surged over 1.5 times of its issue price of $21.
Two notable things about the company include – 500mn registered users with around 20% paid customers and a challenge to the likes of Amazon, Google, and Microsoft.
Spotify is known for the world’s most valuable digital music streaming service that provides access to over millions of songs from artists across the globe. The company generates revenue from premium subscription and has a valuation of $15bn
The IPO, which happened a couple of months ago, was unique in its own way as the company adopted a direct approach and did not involve an investment banker.
With over 60 million customers, the company chose to sell the IPO directly, which was a turned out to be a grand success.
The company’s shares were offered at an initial reference price of $132 and are currently trading at $168. We believe if the process of direct IPO’s succeed, it would undoubtedly open doors for many tech companies. Thus, the IPO’s success remains to be watched.
IPOs That Are Likely to Be Launched in 2019-20
Airbnb has revolutionized the hospitality industry. Unlike other hotel chains like Marriott, Hilton, or Hyatt, Airbnb does not own any property and is merely a platform that brings together the property owner and guest.
Airbnb is valued at $32bn and is ranked just below Marriott in the industry in terms of market capitalization. While aggregators like Airbnb could be a challenge for the IPO market, it would be exciting to see how IT companies offering plain vanilla platforms perform.
India, by far, is one of the largest markets for this Chinese company. Xiaomi is far from being a hard-core tech company.
The company manufactures smartphones and competes with the likes of Apple, Samsung, and OnePlus, but in the lower segment.
In China, technological IPO is not new and we have some of the finest IPOs like Alibaba, Tencent, Baidu and JD.Com, which are inching over $500 bn and $100 bn in market capitalization.
For Xiaomi, the margins remain very thin, but it has great volumes and thus, it will be interesting to see how the IPO for this company, that is valued at over $150 bn pans out.
Are you looking to invest in the funds that provide you with an opportunity to invest in such technology firms? It is simple.
Some Funds That Allow Investment in US Tech Companies Are as Follows:
- Reliance US Equity Opportunities Fund (Direct Growth)
- ICICI Prudential US Bluechip Equity Fund (Direct Growth)
- DSP BlackRock US Flexible Equity Fund (Direct Growth)
- Kotak US Equity Fund (Direct Growth)
Other funds that could be good investment options and provides an opportunity to invest in global equities can be found here.
We believe an investor should park some money in these categories, so that they can benefit from the global technology sector.
Disclaimer: The views expressed in this article are that of the author and not those of Groww