Why India’s Next Tech Giants Are Hiding in Plain Sight | Paavan Gami

Paavan Gami’s central thesis is that some of India’s next major technology companies are already public but still trade like businesses whose potential is poorly understood. They may list with market values of roughly $600 million to $1 billion, while growing quickly and remaining difficult to value by conventional measures. Gami says investors can sometimes buy them at about 15–20 times long-term earnings. He attributes this mismatch partly to underdeveloped private capital markets: companies may bootstrap, then raise $100 million to $200 million more easily in an IPO than in a Series D. A statistic he cited, which he said was two years old, put median Indian IPO market capitalization at $350 million and founder or founding-family ownership at 70%.

Gami sees opportunity both in technology and in fragmented consumer industries, where he estimates independent businesses still account for about 90% of supply in sectors such as pharmacies, grocery, restaurants, hospitals, hotels and auto parts. As regulatory disadvantages to scale diminish, he expects some leaders with 5–6% market share to reach 30–40%. His investment case does not depend mainly on India’s GDP growth: he looks for company-specific market-share gains, such as an e-commerce grocery business with 2% share that he believes can grow largely through its own execution. He argues that India’s broad index is a poor passive proxy because it contains many state-owned, low-return and cyclical businesses.

Eternal, formerly Zomato, illustrates his preference for companies that expand from an established business into adjacent markets. Gami describes food delivery as a 60/40 duopoly with Swiggy, with both businesses earning margins above 5%. In his view, Eternal’s quick-commerce business, which grew from an acquisition, is now larger and more valuable than food delivery; he expected it to become India’s largest grocer within about 12 months. He said it grew from zero to $10–11 billion in top line in roughly three and a half to four years. He bought Eternal at 1.3–1.4 times forward gross merchandise value while it was growing about 70%. Assuming a rough 5% long-term free-cash-flow margin, he estimated that valuation at about 30 times free cash flow, versus offline retailers at roughly three times GMV and 60–70 times earnings. He also points to a structure that gives individual leaders ownership of separate profit-and-loss units and major responsibilities early in their careers.

Meesho represents a different bet: value commerce for customers who prioritize selection and low prices over fast delivery. It began by helping WhatsApp resellers buy from wholesalers, then became a marketplace as consumers ordered through its app. Gami estimates that it handles 70–80% of e-commerce in tier-three and tier-four cities, which he says contain about 1.2 billion of India’s 1.5 billion people. Its average order value is about 250 rupees, or roughly $3, compared with $15–20 for competitors. He argues that the scale and logistics economics are hard for entrants to replicate, and expects value commerce to become larger than Amazon-style e-commerce in India. Meesho aims to lower prices each year through seller competition and more efficient logistics; Gami sees financial services as a possible next business, given credit demand among its largely unbanked customer base of 300 million.

Gami also sees a possible role for India in inference computing, but stresses that this remains a hypothesis and that latency is a challenge. He cites data-center construction costs of about $6 million per megawatt in India versus $16 million in the US, and estimates current Indian capacity at 1.2–1.5 gigawatts, with little GPU-based capacity. Announced additions could reach 1.5 gigawatts annually in three years, he says, potentially implying 8–10 gigawatts by 2030 or 20 gigawatts if India serves global demand. He also sees a supply opportunity in data-center infrastructure: HVAC, piping and liquid cooling account for about 30% of the bill of materials and could be localized, with Indian suppliers serving projects in India, the Middle East and Europe.

RAS Partners holds about 10–12 concentrated positions, typically around 10–12% each, alongside smaller holdings. Gami starts with smaller investments and adds as he builds conviction in a company, its founder and its culture; “marriage” describes the rare case where he would buy more when problems arise. He said the firm made two such investments in its first two years: Eternal and Meesho. His process relies on reference checks and relationships with founders and senior leaders, which can take six or 12 months to develop. He expects AI to automate more desk research and help monitor thesis-critical news, but says investment decisions should remain human; AI-led calls have not worked well for him, and he finds agents too sycophantic. He sees a risk that concentration can create blinders, and acknowledges that India’s opportunity could prove unattractive.