Ah, the dot-com bubble – a time when investors in India were swept up in the excitement of internet-based startups and poured their hard-earned money into companies with names like “e-Nirvana” and “iBall”. It was a time when every other person you met claimed to have a revolutionary idea that was sure to make them a millionaire, if not a billionaire. Companies that had no profits, no real business plan, and no hope of ever being successful were getting valuations that made no sense whatsoever. It was a time when everyone wanted to be the next Mark Zuckerberg or Jeff Bezos, but instead, they ended up being the next Pets.com.
The dot-com bubble, also known as the internet bubble, was a period of intense speculation and investment in internet-based companies in the late 1990s and early 2000s. The bubble burst in 2000, resulting in the rapid decline of internet stocks and many internet-based companies.
The bubble was fueled by a combination of factors, including the growing popularity of the internet, the development of new technologies, and the belief that the internet would fundamentally change the way we do business. Investors poured billions of dollars into internet startups, many of which lacked a clear path to profitability.
The bubble burst in 2000, when it became clear that many internet-based companies were not generating enough revenue to justify their high stock prices. Stock prices plummeted, and many companies went bankrupt. The aftermath of the dot-com bubble was felt around the world, with many economies experiencing a recession.
Furthermore, the failure of internet companies at that time was also due to the fact that banking transactions did not happen easily, and credit cards were the only way of transaction. Cut forward twenty years later, with net banking, UPI, etc., similar internet companies are thriving due to vibrant payment systems.
India was not immune to the effects of the dot-com bubble. Many Indian companies had invested heavily in internet startups, and many of these companies were hit hard when the bubble burst. The Indian stock market suffered significant losses, with many investors losing their savings or investments.
However, the dot-com bubble also had some positive effects on the Indian economy. The bubble led to a surge in investment in the Indian technology sector, with many Indian startups receiving funding from foreign investors. This influx of investment helped to fuel the growth of the Indian technology industry, which has since become a major contributor to the Indian economy.
In conclusion, the dot-com bubble was a period of intense speculation and investment in internet-based companies that ultimately resulted in a rapid decline in stock prices and many company bankruptcies. While the bubble had a negative impact on the Indian economy, it also led to a surge in investment in the Indian technology sector, which has since become a major contributor to the Indian economy.
ABOUT THE AUTHOR
Ketan Sonalkar (SEBI Rgn No INA000011255 )
Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.
Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice
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