Business
Why Sameer Arora Is Betting On Loss-Making Companies: The Logic Behind His Strategy
Last Updated:
Sameer Arora credits these companies’ success to resilience, noting that most competitors exited early, leaving only the strongest players in the market
Sameer Arora remarks that the valuations of unlisted startups remain high because they are not yet publicly traded. (News18 Hindi)
In a recent statement, Helios Capital founder and renowned investor Sameer Arora emphasised three essential factors for investing in new companies today: survival, penetration, and monetisation.
Reflecting this philosophy, Helios Capital has persistently invested in emerging technology companies such as Eternal, Paytm, Ola, Ather, and Swiggy. By August, they had notably increased their stakes in One97 Communications (Paytm), Swiggy, Delhivery, Ola, and Ather Energy. The firm is also investing in CarTrade and PB Fintech.
Sameer Arora attributes the success of these companies to their resilience during challenging times. He recalls that in the early stages, these companies faced competition from hundreds of rivals. Over time, however, most competitors have exited, leaving only a select few.
For instance, the food delivery industry once had 20 players, but now only two remain. Hence, Arora’s strategy focuses on investing in companies that have emerged as winners in this competitive landscape.
Why Sameer Arora Is Betting Big On Quick Commerce
Arora has a particular interest in Quick Commerce. He explains that instead of focusing on the sector’s overall growth, he prioritises the rapid adoption of new features by consumers. He believes that consumers will increasingly prefer Quick Commerce over traditional stores due to the convenience of fast delivery at minimal cost. These companies earn Rs 8-10 per order, with Rs 5 from margins and Rs 3-4 from advertising.
Arora holds a similar view on digital companies like Paytm, noting that consumers are simply shifting their existing expenses to the app, not creating new ones. His team has observed a 70-75 percent profit from their investment in Ather. They also invested in Ola when its market capitalisation was $2 billion, by which time the company had 500 outlets and a solid production system.
Investment Outlook On Loss-Making Companies
Arora remarks that the valuations of unlisted startups remain high because they are not yet publicly traded. He advises making small investments in companies that are not incurring daily losses, as these companies will gradually grow over time.
According to Arora, the market has humbled the founders of such companies, who were previously overconfident. He suggests waiting a year or two before investing in any new company unless it has a particularly compelling story.
Uncertainty Over Consumer Spending Patterns
Arora also shared his views on the GST rate cut. He mentioned that he purchased Hero Motors stock with the GST cut in mind. He believes that when the scheme was announced on August 15, many people delayed buying vehicles to benefit from the price adjustment, causing a temporary halt in sales in late August and early September.
Arora underscores that the real benefit depends on how people choose to spend their money. While there is money in the system, which is positive for consumption, it is not guaranteed that people will buy products from the companies in which they have invested. They could invest in SIPs, pay off debt, or purchase an AC from a foreign brand. Therefore, it is crucial to carefully consider which companies will truly benefit.
September 26, 2025, 19:18 IST
Read More