Srividya Gopal Discusses Impact of Economic Uncertainty in SVCA’s Latest Study on PE/VC Backed IPOs

Srividya Gopal, Managing Director and Southeast Asia Leader in Valuation Advisory Services of Duff & Phelps, is featured in SVCA’s inaugural study on PE/VC backed IPOs. The study details post-IPO performances and features price comparisons that affect the IPO trends and market outlook moving forth.

In the study, Srividya shares her insights on stock markets and the impact of the current economic environment on valuations. She also highlights the factors that constitute a company’s decision to go for a down round.

She states, “Stock markets indices across the world have seen a significant double-digit percentage fall since the beginning of the year. Many economies are predicting recession for 2020. Generally speaking, valuation for most affected sectors will reduce, the proportion of reduction varying based on several factors. How quickly the tide can turn or the valuations recover, depends on how soon this crisis can be overcome and how swiftly the business can bounce back. There are several uncertainties at this point of time.”

She further explains the economic downturn and whether an organization decides to go for a down round or not depends on several factors – does the company have immediate cashflow needs; which sector or sub-sector is the business in and what is the outlook of this specific business in the current scenario; what are the measures the business has put in place to control costs and more. If a company urgently needs cash and is affected deeply by the current situation, it may be forced to do a down round.

You can access the detailed report here.