Naukri IPO – After effects on Internet and Jobsite Industry
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Im sure by now everyone who is associated with Internet or technology would have heard about the Naukri IPO being a huge success. WATblog was probably the first to write about the exact IPO details. Now that the IPO has closed and has been so successful that it has been subscribed over 55 times over all due to heavy subscription from qualified institutional buyers (almost 84 times). The question thats on my mind is what does this mean for the Internet and for the E-recruitment or Jobsite industry in India?
Firstly we must note that Naukri (Infoedge LTD) was one of the first few internet companies which started way back in 1997 and has seen all the good and bad seasons of the internet revolution. So naukri coming out with an IPO though a landmark achievement but was always something that was expected. But what this IPO has done is attracted the attention of the not so internet savvy or I should say internet apprehensive (post bubble burst) financial sector of India. It has shown to the analysts, advisors, investors and even the common man that home grown internet companies can be successful and compete with the international companies (In Naukri’s case take Monster as an example).
What this IPO would have also done is opened the doors for more exposure to the web 1.0 businesses. The reason i say this is because Venture Capitalists may be investing in web 2.0 as they are predicting it to be the future tof internet and probably have more risk taking capacity. But an investor who is not from the technology space would now (after the IPO) be very comfortable in looking at web 1.0 businesses like Jobs, Matrimonial, Real Estate and Travel as well. I feel we may see a lot of regional and niche players rising due to this IPO.
So here’s my point by point analysis:
1) Naukri IPO to bring in more money into web 1.0 businesses like online classifieds from traditional non-technology investors.
2) Naukri IPO has set a standard for other IPO’s like Shaadi and Makemytrip and i see more internet companies going for IPO’s. Especially the ones who have created a national brand presence.
3) The success of the IPO would encourage regional and niche players and probably get more competition in this segment.
4) Naukri will be utilising 30 crores from the 150-170 crores generated from this IPO for acquisition so we can expect some medium to small buyouts in the internet space in the coming months.
5) Naukri also plans to invest in Quadrangle its offline recruitment business and this move will be closely watched as many recruitment agencies use the naukri database and if they have their own recruitment firm which starts taking away clients from others it could cause some bitterness against naukri. Till now naukri has not indulged heavily in th offline recruitment business but after the IPO its strategy remains to be seen.
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