With the recent debut IPO offerings by the Indian unicorns making waves, the Reserve Bank of India has said that “a new era has clearly begun” and “another growth impulse is igniting financial markets”.

“These IPOs of new age companies arrive as bullishness about India mounts, especially around Indian tech. In fact, India’s tech boom has been long awaited, with strong global and domestic appetite for what are widely believed to be world class businesses in the pipeline,” the central bank said in its “State of the Economy” report.

“2021 could well turn out to be India’s year of the IPO,” the RBI said. “These listings coincide with a broader rush by Indian companies to tap the market and the fomo (fear of missing out) factor driving investors, which have taken the benchmark indices to records,” it said.

However, it said this explosion of interest in these companies will only be sustained if they are able to convert innovative ideas into metrics such as breaking eveann at the level of earnings before interest, taxes, depreciation and amortisation (EBITDA) level without expensing business development costs, followed by cash flows and profits. “The jury is still out. Investors will closely scrutinise their stories,” it said.

As per the report, markets regard them as ‘concept stocks’ because they flout the existing conventions — they have neither made profits nor issued any guidance on ever getting to profitability. There are already warnings of systemic risks to financial stability that monetary policy authorities should not ignore as the unicorn IPO party gets going. “The bursting of the dotcom bubble in 2001 showed that many start-ups could go bust, but risk management practices have changed to diffuse this risk over many newcomers. And those that survive can go on to become the Googles, Facebooks and Amazons of the future,” it said.