Many companies have postponed their public offering plans
The tech boom in IPOs in India is in danger of coming to a halt after some of the country’s best-known startups went bankrupt shortly after listing.
A host of prominent tech startups, including Oyo Hotels and logistics provider Delhivery, are pushing for their public debuts and preparing to reassess target valuations, according to the latest announcements. person familiar with the situation. The duo, both backed by SoftBank Group Corp., is one of the country’s highly-anticipated offerings.
India’s burgeoning startup ecosystem faces reckoning just weeks after the country closed a record year for IPOs. Investors have been fed up with new tech offerings following the scandalous public launch of fintech company Paytm, as well as the battering of newly-listed e-commerce operators Zomato Ltd. and Nykaa.
IPO has begun difficult starting this year from New York to London and Hong Kong amid the prospect of rate hikes, geopolitical tensions and increased volatility. In India, the failures turned out to be smart because 2021 is the year that celebrates the birth of the large and vibrant startup sector. Instead, regulators stepped up scrutiny of IPO candidates after investors burned, contributing to the delay.
“Investors are no longer enamored with big-name startups; they want a path to profitability and profitability, not hype and hype,” said Anup Jain, a managing partner at early-stage investor Orios Venture Partners.
An Oyo spokesman said via e-mail that it is standard procedure for the regulator to request clarification of the preliminary IPO filing, adding that “our bankers are actively join them. We cannot comment on specifics.” Delhivery refused to answer.
The owners of Delhivery pushed back its $1 billion IPO to a fiscal year that began in April, some of the people said, requesting anonymity because the details are private. Delhivery is also reviewing its listing plan after the stock market regulator was unsatisfied with investors’ plans to sell a large amount of shares in the IPO, the people said. The logistics startup, backed by Carlyle Group Inc. as well as SoftBank, which had previously planned to list in March.
Oyo, which has come under scrutiny for its ownership structure and suffered heavy losses after filing for a preliminary IPO last year, is also facing legal questions. India’s watchdog has launched queries over Oyo’s ongoing litigation with motel operator Zostel Hospitality Pvt, which is demanding a stake in the company after a failed merger in 2016. .
The approval of the draft prospectus of Oyo’s $1.2 billion IPO plan has been awaited for nearly five months. Its investors include Sequoia Capital and Lightspeed Venture Partners, as well as SoftBank.
The management and bankers of Oyo, officially known as Oravel Stays Ltd., are in no hurry, however, one of them said. They are taking the time to respond to regulators’ queries to slow down the intentional listing process, the person said.
There is also information about the timing of Pharmeasy’s IPO, led by API Holdings Ltd. and Droom Technology Ltd., the auto market, filed for an initial public offering in November. Pharmeasy investors include Prosus Ventures and TPG, while Droom is backed by Beenext and Lightbox Ventures.
Spokesmen for Pharmeasy and Droom declined to comment.
Workers prepare the stage during the listing ceremony for the IPO of One97 Communications Ltd., operator of PayTM, at Bombay Stock Exchange in Mumbai, India, on Thursday, November 18, 2021. One 97 Communications Ltd., India’s pioneering operator of Paytm digital payments brand, flopped in its first deal in Mumbai as investors questioned its valuation and the path to company profits.
India’s first tech IPO craze marks a monumental start to the year for global investors in 2021. Paytm’s parent company, One 97 Communications Ltd., has raised a record 2 $0.5 billion when the company went public in November. However, the company’s stock has plummeted 60% from its IPO price, angering investors and worrying regulators. The broader drop in tech stocks in India and beyond only added to the gloom.
Some say even the US IPOs of startups Druva Inc, InMobi Pte and Pine Labs Pvt have been postponed or postponed to the second half of 2022 or later. Sunnyvale, California-based software-as-a-service provider Druva, mobile solutions startup InMobi, and Singapore-based fintech Pine Labs were all founded in India, where they still have the majority share. its activities.
A Druva spokesperson said by email that “the company will continue to monitor market and industry conditions and will do what Druva is best positioned for future growth and success.”
InMobi and Pine Labs did not respond to requests for comment.
Hanging over India’s listing is a big unknown: the fate of a massive public share sale by India’s state-owned Life Insurance Corporation, which filed a draft prospectus on weekend. Many say the ultimate valuation and investor interest in the so-called “mother of all IPOs in India” can determine the listing plans of tech companies.
Sandeep Murthya partner based in Mumbai at Light boxsaid interest among investors in the public market is growing after two years of “stormy” growth.
“Last year was all about greed and without an alien invasion, the market was ready to accept anything,” Mr. Murthy said. “Fear is creeping in right now but give it a while, greed will come right back.”
(Except for the title, this story has not been edited by NDTV staff and is published from an aggregated feed.)
