NEW DELHI: South and Southeast Asian unicorns don't take the IPO money and run. These tech startups are more likely to engage in cash conservation than cash burn after they lose their horns--i.e., go public.

"We expect more South and Southeast Asian unicorns to become profitable over the next two years as they move from chasing aggressive growth to focusing on core competences," said S&P Global Ratings credit analyst Yijing Ng.

That's according to an analytical study on the financial trajectory of nine former unicorns in India and Singapore, and one in the pre-IPO stage. The article is titled, "South And Southeast Asia Unicorns: A New Credit Story Post-IPO."

S&P Global Ratings believes more former unicorns in the region will be profitable in the next two years.

Nonetheless, our study of former unicorns also shows that profits and cash flow can quickly change direction. This is given the inherent risks in tech sectors, which attract more new competitors than old industries, and have greater regulatory risk.

"Once former unicorns' profitability and cash flows become sustainable, we expect they will shift focus toward sustainable leverage," said S&P Global Ratings credit analyst Shruti Zatakia. "That was the case with U.S.-based Uber Technologies Inc. Multiple rating upgrades on Uber over the past two years illuminate the potential path our rated startups in this region may take."

Our report draws on data from nine publicly listed former unicorns across South and Southeast Asia and one unlisted startup. All of them operate in disruptive tech-based industries, with at least three years of public financial statements.

The report expects more South and Southeast Asian unicorns to become profitable over the next two years as they move from chasing aggressive growth to focusing on core competencies.

Post-IPO, these maturing startups also tend to hold on tight to cash to buffer against risks inherent in nascent tech industries, including evolving regulations and flare-ups in competition.

Sustainable profit and cash flows are key to upward rating momentum. Leverage metrics, almost irrelevant in the days of losses, also become increasingly important.