A playbook for public market success, from Ixigo’s Bajpai and Nazara’s Mittersain | Company Business News
Mumbai: Founders of public companies must be thick-skinned to be able to overcome various hurdles that might come in the way of running a successful venture, said Aloke Bajpai, chairman and managing director of online travel booking platform ixigo.
“When it comes to (decisions like an) M&A, communication is very important. The company should be able to convey why a decision was taken. But there will always be some people who do not understand it. You have to be willing to be misunderstood for a very long time,” Bajpai said during a panel discussion at Mint’s India Investment Summit on Saturday.
“If you are building for the long-term, some short-term decisions may not be understood by the public,” he said.
Nitish Mittersain, chief executive and joint managing director of gaming and esports platform Nazara Technologies Ltd, said a company’s management must trust its own as well as its board’s conviction on any decision with a medium to long-term approach.
“You can’t run a public company well if you’re always worried about the short-term stock price. You will make mistakes and you have to be transparent about it,” Mittersain said at the event in Mumbai.
He also advised founders to continue experimenting with fresh ideas. “Especially in fast-moving technology businesses like ours, if you don’t experiment from time to time, you will become obsolete. Technology evolves so fast that you can either lead from the front or become obsolete,” Mittersain said, adding that well-contained risks are worth taking.
On being IPO-ready
On running public companies, Ixigo’s Bajpai said it was crucial for a corporate management team to set the right expectations among shareholders so as to not over-commit and under-deliver at the time of an initial public offering (IPO).
“It’s basic hygiene to not miss (financial projections for) the first 4-6 quarters. This can be nerve-wrecking for the team as rigour is needed to meet the projections,” Bajpai said. “A private company is more tolerant of misses because the investors on the cap-table may be okay if you miss the plan by 10-20%.”
On IPOs, Bajpai said companies must control the process and not allow banks and investors to command it, and that a company’s management should prioritize attracting long-term investors who will support them.
“You have to call the shots on whether it makes sense for the wider shareholder base you’re aiming for. If there’s even an iota of risk, price it even lower,” he said.
Mittersain highlighted the need for adequate corporate governance practices and discipline in terms of audit and other compliances well in advance of an IPO for a smoother public market listing process.
“The time to IPO for many startups today is much shorter. This means the learning curve will be shorter,” Mittersain said. “I always advise founders to keep basic governance and other practices in place. Think at least 1-2 years ahead of the listing to plan better.”
