According to a report by the Economic Times, out of the 29 companies that went public in India in 2021, one in three stocks was trading below their issue price as of December 28th, 2021. The report also highlighted that some of the most anticipated IPOs of the year, such as Zomato and Paytm, have also witnessed a drop in their share prices. The COVID-19 pandemic, regulatory changes, and a volatile stock market were some of the factors that impacted the performance of these IPOs. Despite the challenging market conditions, the report suggests that companies will continue to tap into the IPO market in the coming years.
Top IPOs in 2021
Zomato IPO
Zomato’s IPO was launched in July 2021. The IPO offered up to 13.05 crore equity shares, including a fresh issue of up to 9,375,000 equity shares and an offer for the sale of up to 3,750,000 equity shares. The price band for the IPO was set at INR 72-76 per share, with a minimum lot size of 195 shares. The IPO was oversubscribed by over 38 times, with strong demand from both institutional and retail investors. Zomato made a strong debut on the stock market, with its shares soaring more than 80% on the first day of trading.
Zomato’s IPO has been viewed as a landmark event for the Indian Startup ecosystem, with several other Indian Startups expected to follow suit and go public in the coming months. The successful IPO has also been seen as a positive development for the Indian capital markets, which have struggled in recent years due to a lack of new listings. The Zomato IPO has generated significant investor interest and is expected to pave the way for more high-profile IPOs in the future.
Nykaa IPO
Nykaa IPO was launched in November 2021. The IPO offered up to 43,112,100 equity shares, including a fresh issue of up to 4,815,703 equity shares and an offer for sale of up to 38,296,397 equity shares. The price band for the IPO was set at INR 1,085-1,125 per share, with a minimum lot size of 13 shares. The IPO was oversubscribed by more than 81 times, with strong demand from institutional and retail investors. Nykaa made a strong debut on the stock market, with its shares surging nearly 82% on the first day of trading.
Nykaa’s core strength lies in its strong brand image and customer base in India, with over 17 million registered users and 1.6 million active customers. The company has a diversified revenue stream, with its e-commerce and private label segments accounting for a significant portion of its revenue.
PB Fintech IPO
Policybazaar IPO, which was launched in November 2021. The IPO offered up to 3,856,925 equity shares, including a fresh issue of up to 1,500,000 equity shares and an offer for the sale of up to 2,356,925 equity shares. The price band for the IPO was set at INR 940-980 per share, with a minimum lot size of 15 shares.
The IPO was oversubscribed by more than 24 times, with strong demand from both institutional and retail investors. However, the stock made a weak debut on the stock market, with its shares dropping nearly 11% on the first day of trading. The reasons for the lackluster performance include concerns about the company’s high valuations and regulatory changes in the insurance sector.
Paytm IPO
Paytm IPO, which was launched in November 2021. The IPO offered up to 105,178,248 equity shares, including a fresh issue of up to 75,000,000 equity shares and an offer for the sale of up to 30,178,248 equity shares. The price band for the IPO was set at INR 2,080-2,150 per share, with a minimum lot size of 6 shares. The IPO was oversubscribed by more than 1.9 times, with strong demand from institutional investors. However, the stock made a weak debut on the stock market, with its shares dropping nearly 28% on the first day of trading.
Paytm’s growth prospects are strong, particularly in the digital payments and financial services segments, which are expected to grow significantly in India. The company has identified several growth drivers, including the expansion of its user base, the development of new products and services, and the exploration of new markets. It also plans to expand its merchant network and invest in its technology and infrastructure to support its growth.
MTAR Technologies IPO
MTAR Technologies is an Indian precision engineering solutions company that offers critical and differentiated engineering solutions to customers in the nuclear, space, and defense sectors. The company’s initial public offering (IPO) was launched in March 2021 and offered up to 10,372,419 equity shares. This included a fresh issue of up to 2,150,000 equity shares and an offer for the sale of up to 8,222,419 equity shares.
The price band for the IPO was set at INR 574-575 per share, with a minimum lot size of 26 shares. The IPO was oversubscribed by over 200 times, indicating strong demand from both institutional and retail investors. The company’s shares made a strong debut on the stock market, with their value rising over 85% on the first day of trading.
Paras Defence and Space Technologies IPO
Paras Defence and Space Technologies is an Indian defense and aerospace engineering company that offers a range of products and services, including defense and space optics, electro-optics, and optoelectronics. The company’s initial public offering (IPO) was launched in September 2021 and offered up to 17,244,328 equity shares. This included a fresh issue of up to 8,572,864 equity shares and an offer for the sale of up to 8,671,464 equity shares. The price band for the IPO was set at INR 165-175 per share, with a minimum lot size of 85 shares.
The IPO was oversubscribed by over 304 times, indicating strong demand from both institutional and retail investors. The company’s shares made a strong debut on the stock market, with their value rising over 10% on the first day of trading.
The company’s core strength lies in its ability to design, develop, and manufacture mission-critical defense and space products and systems. It has established relationships with several customers, including the Indian Army, Navy, Air Force, DRDO, and ISRO. Paras Defence and Space Technologies also has a diversified customer base, which reduces its dependence on any single customer.
How was the IPO trend in 2021
The year 2021 was a record-breaking year for the Indian IPO market, with a total of 63 companies raising over INR 1 lakh crore, the first time the INR 1 lakh crore milestone has been achieved in a single year. This was largely due to the strong investor interest in IPOs, which saw oversubscription rates of up to 100 times in some cases. The year saw a mix of big-ticket IPOs, such as Zomato, Paytm, and Nykaa, as well as smaller ones, with companies from various sectors such as technology, consumer goods, and financial services going public. The strong performance of the IPO market in India reflects the growing investor confidence in India’s economic recovery and growth prospects.
How to Analyze IPOs That Came After the Pandemic
Analyzing IPOs that came after COVID-19 requires a thorough assessment of the impact of the pandemic on the IPO market and the specific industry in which the company operates. Some key factors to consider when analyzing IPOs in the post-COVID era include:
- Market trends: The pandemic has significantly affected the economy, causing volatility in the financial markets. Therefore, it is essential to analyze the market trends to determine if the market is stable enough for new IPOs to thrive.
- Industry trends: The pandemic has had a varying impact on different industries. Some sectors, such as healthcare and technology, have seen growth and increased demand, while others, such as hospitality and tourism, have been severely impacted. It is important to analyze the industry trends to understand the growth potential and risks of the company.
- Company financials: Analyzing the company’s financial statements, such as the income statement, balance sheet, and cash flow statement, is crucial in determining the company’s financial health and growth potential.
- Management team: The management team’s experience, expertise, and track record can play a significant role in the company’s success. Analyzing the management team’s background, industry experience, and vision can provide insight into the company’s growth potential.
- Competition: It is essential to analyze the competitive landscape and the company’s positioning in the market. Understanding the competitive landscape can help investors determine the company’s growth potential and market share.
- Investor sentiment: The post-COVID era has created uncertainty and increased risk aversion among investors. It is essential to analyze the investor sentiment towards the company and the IPO market in general to determine the company’s ability to attract investors.
Conclusion
In conclusion, the IPO market in 2021 has been strong despite the challenges brought on by the COVID-19 pandemic. The market has seen a surge in IPO activity, with several companies going public and raising significant amounts of capital. The technology and healthcare sectors have been particularly active, with high-profile companies going public. The successful IPOs in 2021 demonstrate investor confidence in the companies and their growth potential.