Internet Sector - Our ‘5.something’ Framework For Internet IPOs: ICICI Securities

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ICICI Securities Report

With a barrage of internet companies about to hit the markets, ‘which model?’, ‘which vertical?’, ‘which company?’ etc. are currently the billion dollar questions for investors.

However, less important and ephemeral metrics (e.g. gross merchandise value, ‘near-term’ losses / valuations) are now commanding undue attention of the street / media.

Category adoption / brand building equals to or more than dented profitability (e.g. Amazon over 1994-2003) equals to or more than optically-bloated ‘near-term’ multiples (Google’s IPO was priced 120 times trailing earnings per share).

However, the more fundamental drivers of long-term scalability, sustainability and profitability are often overlooked.

Our ‘five point something’ framework tries to address this white space in the street’s thought process.

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