This Company Made 1,000x Gain When Zomato Listed

This was a new company visiting our campus for day 3 recruitments.

After behemoths like TCS, Accenture, HDFC, and Kotak Bank, it was common for little known companies to find a place in the college campus recruitments.

As the batch of 2005, we students had already heard of a job portal called Naukri.com. The concept of portal itself was a novelty back then. Internet infrastructure was limited to offices, colleges and cyber cafes.

So, uploading CVs on such a portal was a new and upcoming trend.

It was common for recruiters to make a presentation to the potential recruits. Most of the batch was curious about this new dotcom company. So, Mr Sanjeev Bikhchandani's presentation had a packed auditorium.

Having been in the job listing business for a little over 8 years, Naukri.com already had a fair share of corporate clients. Mr Bikhchandani called it a network effect. He showed us some compelling data on what a network could do to the business.

Interestingly, unlike other recruiters, he did not tell us what he expected from new recruits. Rather, he chose to ask some of us what we expected from our employers. And what we thought would make us good leaders.

I particularly remember these words...

• Leaders are created in life, not in any business school. That could actually happen anywhere - be it at work, school or college. But it wouldn't happen through mere degrees. Business degrees definitely give you some knowledge, but they do not make you a leader.

Though I wasn't keen on the role offered, the presentation left me impressed.

Naukri.com was just one of the businesses of its parent company, Info Edge. It also owned a matrimonial platform Jeevansathi.com. It had also launched a real estate portal 99acres.

These were all very new and untested businesses in India. But there was proof that customers world over were warming up to such services.

After Info Edge listed in 2006, there was more clarity on its investments.

Naukri.com was already profitable. But the other subsidiaries had a bigger addressable market. Insurance broker Policy bazaar (PB Fintech) and food delivery company Zomato were the most promising investments of Info Edge.

As India's digital penetration exploded, Info Edge became the quintessential venture capital firm that Indian startups needed.

Between 2014 and 2020, Info Edge tripled the number of startups it incubated or invested in. The fact that it was a listed firm was the icing on the cake.

When the pandemic struck in 2020, most of Info Edge's companies saw their business grow multi fold. The volume of job searches, insurance purchases, online food deliveries etc went through the roof.

More importantly, investors acknowledged the power that Info Edge had with a whole host of startup investments on its balance sheet.

Images like these were widely circulated on social media...

Finally, in 2021, Zomato got the opportunity it had waited for eleven years.

The stock market regulator eased listing norms for startups on Indian bourses. And Zomato became the first such startup to seek listing.

Despite not having any profits to show, the company managed a stellar show on the bourses on the back of its growth promise.

Mr Sanjeev Bikhchandani tweeted the exact chronology of Info Edge's regular investments in Zomato at various price points.

Turned out the shareholders of Info Edge had made a neat 1,000 times profit on Zomato on its listing!

This was a mind-boggling gain by any stretch of imagination. But there was more to come.

The insurance broking arm Policy Bazaar (through PB Fintech) also got listed, adding to Info Edge's shareholder fortunes.

Plus, Info Edge's investment in new startups continued to grow in geometrically. Info Edge did not just set up a fund to dedicate investment in tech startups. But it also encouraged subsidiaries Zomato and Policy bazaar to do so.

In fact, some of these businesses are chasing opportunities in new areas. Do you remember, me writing about Zomato's foray into the fintech space last week? Well, the digital world allows companies to accelerate the pace of testing and failing at new ideas. Info Edge and its subsidiaries may continue to do so.

Do I find Info Edge to be the ideal VC-like investment in Indian markets?

Maybe. Maybe not.

There is more to it than meets the eye.

What is most exciting is that the time is ripe for investors like you to start thinking like the traditional venture capitalists that built real sustainable businesses. These businesses made their investors very rich.

Over the last few months, my colleague Richa and I have poured over hundreds of VC deals to uncover the secret to making VC-like gains.

You will hear more from us soon.

But if you would like to get started right away with this kind of investing, I request you to join Richa and me on Monday, 28 February, at a very special online event.

We will share with you the secret of making big returns like a venture capitalist.

You can reserve your free seat here.

Warm regards,


Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst)

PS: If you would like to make VC-like returns in the stock market, you must attend our free online event this coming Monday. Book your free seat.