There is almost this palpable excitement in the IPO market today. The sense of anticipation is all around and one cannot help but think that it is very similar to the frenzy one saw during the Reliance Power IPO. With more and more younger retail investors joining the stock market and with majority of them familiar with Zomato, having used it probably a zillion times, there is a mad rush to subscribe to the IPO. Be it for listing gains or long term, everyone seems to want a piece of this pie, irrespective of all the fundamentals – it’s a loss-making company, with a very high valuation.

So, what is this frenzy all about? Zomato is India’s first fully desi bred app and it’s become almost a generic name for food delivery. The brand equity and association in day-to-day life is so high that no one really wants to get into the metrics of the company. Its really all about FOMO – Fear of Missing Out.

This is India’s first start-up unicorn and in many ways, a market disrupter, which always means you have struck something solid. Obviously, the buying frenzy is also because it is one of India’s most successful start-ups and a source of inspiration for many entrepreneurs. Zomato, Flipkart, Ola, Swiggy, Snapdeal, Quikr, Delhivery, Byjus, Paytm – these are the most successful brands of today and completely desi bred, notwithstanding the funding from the VCs abroad. Thus, the fancy is more psychological than logical.

People are queuing up to invest in an idea – maybe it will be successful or not, yet everyone doesn’t mind taking a chance. They can see that it is loss-making but the idea is that it will turnaround soon. Amazon, when it went public, was loss-making and look where it is now. That’s the psychology – people are viewing every unicorn as a future Amazon in the long run because market disruption and losses is what Amazon started with.

And therein lay the main question – can our unicorns, however successful they might be here, have the capacity to become a global brand? Can Flipkart, Zomato and Paytm become an Amazon or Uber? Zomato says that it has a presence in some 25 countries – is that why hopes are high, despite the losses, that it is on its way to become an MNC?

This is a new breed of companies hitting the IPO scene – loss making but very high on valuations because they enjoy a very high brand equity. And Zomato is the first mover here too; if this does well, other unicorns, already queued up, will rush in. Maybe, we are now witnessing the creation of a new breed of investors too – those who are discounting only the future.

PS: This is neither a recommendation nor a rebuttal of the Zomato IPO – it is just a look at how the unicorns are set to dominate the IPO markets in the coming days and months.