Tech companies aim for initial public offerings, taking the lead in the financial sector
Five initial public offerings (IPOs) are scheduled for this week, with Tata Technologies Ltd. being the most anticipated one. Together, they are expected to generate more than ₹7,300 crore, together with those of the Indian Renewable Energy Development Agency, Fedbank Financial Services (Fedfina), Flair Writing Industries, and Gandhar Oil Refinery. Nonetheless, a more intriguing group of at least nine cutting-edge tech businesses is honing their products to enter the market following the general election of the next year.
According to bankers and business professionals, FirstCry, Lenskart, Swiggy, PayU, MobiKwik, and Infra.Market, OfBusiness, and PhonePe are a few of the cutting-edge internet firms hoping to raise over $2 billion in 2024 (or around ₹16,600 crore at the current exchange rate). The last time India experienced a comparable wave of tech-driven startup launches was in 2021, during the initial public offerings (IPOs) of Nazara Technologies, Zomato, Policybazaar, and Nykaa.
IPOs are being considered by several supply-side companies as the best way to provide their investors with an exit strategy. Demand-side factors that could affect the primary market include the results of the general election and the future state elections, according to Pranav Haldea, managing director of Prime Database Group. According to Haldea, the primary market has always been quite boring in the 25 years leading up to elections.
Experts warned that the outcome of the state elections, which begin in December, will influence public opinion and may provide a preview of the general election.
The head of equity capital markets at a major domestic investment bank, who wished to remain anonymous, stated: “There could be a small window before the general elections, which some of the companies that have already filed documents with Sebi (markets regulator Securities and Exchange Board of India) and secured approval will look to exploit.”
Before listing, Razorpay and Groww are attempting to relocate to India. As it gets ready for an IPO, Ola Electric Mobility announced last week that it has changed its status to public business.
According to a source familiar with the company’s plans, Ola Electric is attempting to hold its initial public offering (IPO) before March. “It’s a tight deadline,” stated one of the individuals mentioned earlier. Among others, Kotak Mahindra Capital Co. and Goldman Sachs have been picked by the corporation to handle the problem.
According to someone with knowledge, Ola Electric’s bankers are working hard to submit the draft share sale documents by the end of this month. They also mentioned that it would be difficult to make the March deadline and that the IPO might not occur until after the elections.
In the first quarter of 2024, FirstCry and Swiggy which have already chosen bankers are probably going to submit draft documents. Despite having submitted its paperwork twice before, Oyo has not received a Sebi approval. OfBusiness, PhonePe, Lenskart, and Infra.The market has not yet hired bankers.
One of the individuals cited above stated, “These companies are talking to bankers on prospective IPO plans but have not yet hired [them].” “These businesses are excellent candidates for an initial public offering (IPO) because they have all strived to improve unit economics and turn a profit.”
Preparing share sale documents, obtaining regulatory approval, holding road shows, and setting IPO prices all take three to five months for companies. Therefore, to be prepared to enter the markets after the elections, they must begin working in the first quarter of 2024.
