That's because India does not have a serious venture capital industry with an appetite for risk, observes T N Ninan.
Is India's start-up tech sector coming of age? That question could be interpreted in three or four ways.
Start with valuation: Are unicorns (start-up tech companies valued at a billion dollars or more) getting respectable numbers on market capitalisation? And where does India stand in global unicorn rankings?
Then, are these entities becoming real businesses rather than just a gleam in some venture capitalist's eye?
In other words, do they have large employee strength and enough sales revenue to make a difference to their business sector? And finally, are they profitable?
The answers will vary.
For instance, as Business Standard paper reported, India now has 37 unicorns, having added 16 to the list in 2020.
It stands third in global country rankings, well behind the US and China, but is ahead of the UK and Germany.
That is an impressive show.
But there's a twist in the tale: Indian entrepreneurs have got more unicorns overseas than in India -- 40, according to the latest Hurun Global Unicorn List.
Then, consider that the top six firms with the greatest value in the US are all tech firms -- making this the stock market story of the last decade.
From that perspective, only three or four of India's 37 home-grown unicorns might be considered for inclusion in the Nifty50 -- if and when they get listed.
The difference. of course, is that the US tech giants have created global platforms, breakthrough technologies and global products, while the Indian firms are basically capitalising on the numerical strength of the domestic Web-based market, often with me-too businesses.
That partly explains why the combined value of all 37 unicorns is still only about 5 per cent of India's total stock market valuation.
And a still smaller share if you include in the calculation other businesses not listed in India. but which have a big local presence, like Coke, Pepsi, Hyundai and Cognizant.
The biggest unicorn, Flipkart, is worth less than one-sixth of Reliance.
You could consider that small, or impressive given the relative time frames involved.
The real point, though, is that the game has barely begun.
What about sales revenue and employee strength?
The bigger unicorns are notching up half-way serious numbers, especially after the pandemic which has helped many digital businesses gain traction in e-commerce, edtech, fintech and other fields where unicorns play.
Even before the pandemic, Flipkart had reported revenue of Rs 36,400 crore (Rs 364 billion) for 2019-2020 -- in a country where organised retailing is still only a tiny slice of the pie.
In edtech, the Byju's revenue number is less than a tenth of Flipkart, as is its valuation, but it has started reporting profits -- and margins over time may be better than what is usual for a retailer/wholesaler.
It goes without saying that most unicorns are still burning cash, and therefore are value-destructive from a GDP perspective.
But Amazon did not turn in a profit till 2016, more than two decades after its founding.
Now its bottom line is surging.
Some Indian unicorns are already turning the corner.
Besides, valuation is an asset that can be used to acquire or merge with lower-value businesses that have real revenue.
Remember AOL and Time Warner in 2000.
Finally, who is making the money? The big investors are from overseas: Japan's Softbank, China's Alibaba, and Sequoia from the US.
That's because India does not have a serious venture capital industry with an appetite for risk.
With the notable exception of Mukesh Ambani's Reliance, the country's established conglomerates have mostly stuck to traditional businesses.
Ratan Tata, post-retirement, began investing in start-ups.
His portfolio includes at least two unicorns (Paytm and Ola), while the Tata group is belatedly eyeing the acquisition of Big Basket.
Most conglomerates could therefore be losing out on the change in the wealth-creation game.
This is not atypical.
Other than Reliance and Tata, they failed to capitalise on the big stories of the past couple of decades: Software services and telecom.
Retail investors, on the other hand, may get their opportunity when unicorns start listing on the market -- as some plan to do because they see profitability as being not too far away.
Feature Presentation: Aslam Hunani/Rediff.com