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# Indian SaaS Unlisted Shares — How to Invest in India's Software Boom Before the IPO
India has emerged as a genuine global SaaS powerhouse. Companies like Freshworks, Zendesk (founded by Indians), and a generation of "SaaS from India" companies have proved that world-class software businesses can be built from Bangalore, Chennai, and Pune selling to customers globally.
Many of the next cohort of Indian SaaS companies are in their pre-IPO phase — raising growth capital but not yet listed. For investors, this creates an opportunity to participate in the sector before public market valuations kick in.
Disclaimer: SaaS company valuations are sensitive to interest rates, growth expectations, and public market sentiment. Unlisted SaaS shares are illiquid and can take many years to deliver liquidity. This is educational content, not investment advice.
The Indian SaaS Landscape
India's SaaS ecosystem has two distinct profiles:
Global SaaS (India + World) Companies built in India to sell globally — often in horizontal categories (CRM, ITSM, customer support, payments infrastructure). These companies typically earn in USD, have global enterprise clients, and are valued like US SaaS peers.
Examples: Freshworks (listed on NASDAQ), Postman, Browserstack, Chargebee, Leadsquared
India-specific SaaS Companies solving uniquely Indian problems — GST compliance, pharma distribution ERP, HRMS for Indian labour law, logistics route optimisation for Indian road networks. These sell in INR, have lower CAC but also lower ACV (Annual Contract Value), and are valued on Indian SaaS benchmarks.
The SaaS Metrics That Matter Most
Before buying any SaaS unlisted share, understand these numbers:
### ARR (Annual Recurring Revenue) The annualised value of all active subscription contracts. This is the primary top-line metric for SaaS.
### Net Revenue Retention (NRR) NRR = (Revenue from existing customers at year-end ÷ Revenue from those same customers at year-start) × 100
- NRR > 120%: Exceptional (Snowflake, Datadog tier)
- NRR 100–120%: Good — company grows without adding new customers
- NRR < 100%: Churn is a problem
This is the single most important metric for SaaS valuation. High NRR means the business compounds naturally.
### Gross Margin SaaS gross margins should be 70–85% for pure software companies. Below 60% suggests significant infrastructure cost (cloud) or services revenue mixed in.
### CAC Payback Period How many months of gross profit from a new customer does it take to recoup the cost of acquiring them?
- < 12 months: Excellent
- 12–24 months: Good
- > 24 months: Concerning
### Rule of 40 Growth rate (%) + EBITDA margin (%) ≥ 40 is the benchmark for a healthy SaaS business. A company growing at 50% with -10% EBITDA still passes; a company growing at 20% with 15% EBITDA also passes.
Valuation Framework
Public market SaaS multiples in India and globally have compressed since the 2021 peak. As of 2026:
| Profile | EV/NTM ARR Range | |---|---| | Fast-growing (>40% ARR growth), high NRR | 8–15x ARR | | Medium growth (20–40%), good NRR | 5–8x ARR | | Slower growth (<20%) but profitable | 3–5x ARR |
For unlisted SaaS companies, apply a 30–40% illiquidity discount to comparable public multiples.
Example calculation:
- Company ARR: ₹150 crore
- Growth rate: 35%
- NRR: 110%
- Public comparable multiple: 8x ARR → ₹1,200 crore valuation
- Unlisted discount 35%: ₹780 crore implied valuation
- Total shares: 1 crore shares → implied price = ₹780/share
If the unlisted share is trading at ₹600, you're getting it at a further discount. If it's trading at ₹900, you're paying a premium to the illiquidity-adjusted comp.
The IPO Path for Indian SaaS
Indian SaaS companies have two IPO routes:
Indian exchange listing (BSE/NSE) Suitable for companies with significant India revenue. Recent examples include Nuvoco, RateGain, IndiaMart. The Indian SaaS IPO market has matured significantly since 2020.
US listing (NYSE/NASDAQ) For global SaaS companies with predominantly USD revenue. Freshworks went this route. Global listings give access to a deeper pool of SaaS-specialist investors and typically command higher multiples.
For unlisted investors: The IPO route determines your liquidity currency. A company listing in India gives you INR exit; US listing gives USD exposure.
Key Risks
- 1Valuation compression: Rising interest rates globally compress SaaS multiples — the same company earning the same ARR can be worth 30% less if public market multiples fall
- 2Competition from global incumbents: Salesforce, Microsoft, and ServiceNow enter Indian markets with bundled pricing; vertical SaaS players can be squeezed
- 3Talent and optionality: The best SaaS founders have multiple capital options; a company that raises on Polemarch may have had trouble raising from VCs
- 4Accounting complexity: SaaS revenue recognition (ASC 606) is non-trivial; understated deferred revenue or overstated ARR are warning signs in financial diligence
*Published by the Polemarch editorial team. Not investment advice.*