Dalal & Broacha’s Milind Karmarkar Picks Top Bets Among Platform Players
One of the biggest opportunities for platform businesses in India lies in the fintech segment.
That’s according to Milind Karmarkar, head-research at Dalal & Broacha Stock Broking Pvt. The fintech sector could be predominantly driven by digital platforms into lending to small and medium businesses and supply-chain financing as they are in the developing phase.
Broking houses that completely digitise could also be in a better position to handle increased trading volumes led by a post-pandemic recovery in India, he said in an interview with BloombergQuint. Asset, investment and wealth management, and investment advisory could be revolutionised, he said.
Gaming, music, online retail and power trading platforms also stand to gain from this change, according to Karmarkar.
Six to seven of the top 10 companies in the U.S. are platform businesses, Karmarkar said. And this trend may be catching up in India soon.
Platforms are not new, except for blockchain, but a way of doing business and digitisation has changed a lot of things, he said. It’s a hub-and-spoke model—“a many-to-many or a one-to-many correspondence depending on the business requirement”, he said.
Valuation of these businesses could be derived from the reach they create, he said.
A Pioneer Faces Challenges
Indiamart Intermesh Ltd. was the pioneer of platform business in India. And it enjoys a high valuation on account of its first-mover advantage, said Karmarkar. But he doesn’t see this as a ‘winner takes it all’ model, and expects at least two to three players to thrive. JdMart, a subsidiary of Just Dial Ltd., and Amazon are becoming aggressive competitors and may affect Indiamart’s valuations, he said.
Karmarkar’s Top Platform Bets
- Gaming and entertainment companies like video-sharing platforms.
- Music companies hosting music through various online music platforms having large music libraries like Saregama.
- E-retailing companies like Amazon, Flipkart with strong platforms selling fast-moving consumer goods.
- Power-trading platforms like IEX may offer the ability to purchase additional power over the requirement, like in Europe.
Watch the full interview here: