Fortune India Exclusive: Peak XV’s Shailendra Singh on the IPO markets, and why they are not for everyone

After carving out a new identity two years ago, following the split from famed Silicon Valley venture capital (VC) firm Sequoia, Peak XV has, over the past four years, seen nearly 17 of its portfolio companies go public in India and the South Asian markets.

Shailendra Singh, Managing Director, Peak XV, in an exclusive interview with Fortune India, said that his firm continues to be bullish on the Indian IPO story and is holding on to a sizeable public book.

The VC firm’s line for near-term IPOs includes fintech firms like Groww and Pine Labs, online marketplace Meesho, loyalty management platform Capillary Technologies, online insurance platform Turtlemint, and sleep and home solutions product company Wakefit. Given the decent scale of some of the current breed of companies looking at IPOs, citing examples of companies such as Lenskart and PhonePe, Singh said, “We admire them a lot, even if they are not our own portfolio companies. And I think it's great that retail investors will get a chance to own some of these.” 

Explaining the rationale of Peak XV holding on to some of its portfolio firms even after going public, Singh said, "We try to tailor our approach to the size and the scale of the company, how long we have already been invested, where is that fund in its maturity, and so on. So, all these factors weigh into how we consider selling down, but we take, typically, several quarters after the IPO, before starting our first sell-down.”  

Even as IPOs bring in an exit event to stakeholders, Singh emphasized that valuation alone is not the sole determining factor. As an investor, he says the conversation with the founders is to prepare them for the IPO from a long-term lens, with the IPO being a transition from a private set of investors to mutual funds or retail, where governance takes centre stage.

“Honestly, I don't think the IPO markets are for everyone. I do think we should be asking a lot of young companies, 'Please don't go public if you're not ready,' especially subscale companies should not go public if they're not ready. I would much rather have our smaller companies not be opportunistic to go public, and stay private longer, and only go public when they get fully ready,” Singh said.