scorecardInfo Edge is now worth almost $10 billion even with its profits falling for five quarters in a row
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Info Edge is now worth almost $10 billion even with its profits falling for five quarters in a row

Info Edge is now worth almost $10 billion even with its profits falling for five quarters in a row
Business5 min read
  • One of India’s oldest internet companies Info Edge’s share price has almost doubled in the last one year, with its market cap close to $10 billion.
  • Info Edge’s presence in the stock market as one of the only purely digital players has made it a ‘stock of the future’.
  • The company’s bull run is also facilitated by the fact that two of its star investments, Zomato and PolicyBazaar, are headed for an IPO in 2021.
If you want to have a stake in the booming digital businesses of India, buying shares in Flipkart or BYJU’S – the world’s most-valued edtech startup⁠— is not an option. But, there’s one company where you can buy shares⁠— Info Edge, which has become a listed proxy for the spiking valuations in tech startups.

Info Edge, one of India’s oldest internet businesses, has multiple startup investments including two unicorns ⁠— food delivery app Zomato and insurance aggregator Policybazaar ⁠— both of which are headed for a debut in the share market. A unicorn is a private firm with more than a billion-dollar valuation.

This has resulted in Info Edge’s share price almost doubling in the last one year, and its market cap is close to $10 billion. Zomato will be ready for an IPO in three months, the chief financial officer revealed in a television interview. But that’s not the only reason for the rally in Info Edge shares.

BI India/Flourish

Info Edge’s core business includes four internet firms that are spread across lucrative industries – recruitment portal, real estate aggregator, matrimony platform and edtech vertical

The company’s vision and play in India’s internet economy has also been recognized by the Indian government. Info Edge’s founder Sanjeev Bikhchandani, who leads startup investments for the company, has also been awarded Padma Shri, the country’s fourth highest civilian honour in January 2020.

Markets are forward-looking and Info Edge is being seen as the business for the future

The much-awaited IPO from Zomato and Policybazaar may be the cherry on top. There is a lot else inside Info Edge, which makes its shares attractive. “We don’t have a completely digital listed company in India and Info Edge is the only representative as far as the digital age is concerned. That’s why there is exuberance from institutional investors,” said Kranthi Bathini, equity strategist at WealthMills Securities.

The excitement around Info Edge is so high that investors have ignored the company has seen its profit decline for five straight quarters. “Info Edge has a unique business model and when you talk about the double digit GDP growth that India is aiming for, these are the kind of companies that will give tremendous returns,” said Bathini.

info edge revenue profits final.
BI India

“The company is expected to witness improving revenue and margin trends in coming quarters led by opening up of economy and market share gains,” said a ICICI Securities report from November 2020.

For Info Edge, the recruitment portal is the only cash cow. However, the last year has been tough due to the crash in sectors like real estate and employment opportunities, which went from bad to worse during the pandemic.

Info edge segment final.
BI India

Zomato – the star in Info Edge portfolio

But it’s not just its own businesses that make Info Edge an attractive stock. Within it’s long list of investee companies, is the foodtech unicorn Zomato, which is expected to open the floodgate of technology IPOs in India in 2021. There’s also the insurtech unicorn PolicyBazaar which is looking at an IPO this year.

In an earlier interview with Business Insider, Hitesh Oberoi, CEO of Info Edge had said, “We had invested in Zomato, when it wasn’t even called so. It was called Foodiebay then. When we had started investing, there was no SoftBank (Japanese investment firm) – we were in the mindset to start investing in businesses that we understand.” Info Edge has an over 20% stake in Zomato.

Info Edge is doubling down on its image as the only game in the market for those who want a bite out of the digital boom. It announced its latest acquisition on Friday (February 12) along with its earnings. 4B Networks, which is a platform for brokers and developers, is also now in the Info Edge kitty.

“Zomato’s and PolicyBazaar’s IPOs will be wealth creation for investors. Info Edge has invested in a lot of startups and the hope is that some of them will go on to become as successful as Zomato or Policybazaar,” said a market analyst.

Some of Info Edge’s top investments
Zomato, foodtech unicorn
Policybazaar, insurtech unicorn
Makesense Technologies, recruitment software developer
Shopkirana, a B2B e-commerce platform connecting FMCG brands and retailers
Bijnis, a B2B e-commerce platform connecting manufacturers and retailers in the fashion industry
Shipsy, a global logistics SaaS company
Ustraa, a leading D2C men’s grooming brand
Gramophone, an agri-tech company providing agronomic insights to farmers coupled with delivery of agriculture inputs
Adda247, a government jobs focused online test preparation platform among other businesses., student career guidance platform
Nopaperfoams Solutions, enrolment automation platform