In the world of finance, Initial Public Offerings (IPOs) have long been regarded as one of the most exciting events for investors and companies. As we enter 2023, the IPO market is expected to be particularly active, with several high-profile companies planning to go public in the coming months. These companies are expected to raise billions of dollars, which could potentially reshape their industries and fuel further innovation. We will explore the upcoming IPOs in 2023, the companies behind them, and what investors can expect from these highly anticipated events.
Upcoming IPOs in 2023
Fintech firm MobiKwik’s plan to raise Rs 1,500 crore from its IPO has been on the cards for a while now. The company had initially postponed its IPO plans due to market uncertainties caused by the Covid-19 pandemic. However, with the economy slowly recovering and the markets stabilizing, MobiKwik could potentially launch its IPO in 2023. The company’s draft document for IPO highlights that it was hit by the pandemic, but it has since then bounced back to pre-Covid levels, and its business has performed well. The success of the IPO will depend on several factors, including market conditions, investor interest, and the performance of the company leading up to the listing. As MobiKwik is a leading player in the Indian fintech space, its IPO will be closely watched by industry experts and investors.
Tata Technologies and tata play IPO
The announcement of two IPOs by Tata Group in 2023 is indeed great news for its fans and investors. The company has a history of successful IPOs, with TCS going public in 2004 and becoming India’s largest software services company. The upcoming IPOs of Tata Play and Tata Technologies are expected to generate a lot of interest among investors and could potentially raise billions of dollars. Tata Play has already used the confidential pre-filing of documents option for its IPO, a new feature introduced by SEBI in 2021 to simplify the IPO process for companies. Meanwhile, Tata Technologies’ IPO is expected to be released in the first quarter of the financial year 2023-24. With both companies having a strong presence in their respective industries, it will be interesting to see how IPOs perform in the market.
Le Travenues Technology Ltd, the parent company of online travel platform ixigo, was granted approval by SEBI in December 2021 for its Rs 1600 crore initial public offering (IPO). Despite posting profits in the first quarter of the 2023 fiscal year, the company has yet to initiate the IPO process and appears to be in a “wait and watch” mode. The reason for the delay is uncertain, but the company may be waiting for favourable market conditions or strategic opportunities before launching its IPO. With the travel industry showing signs of recovery following a challenging period, ixigo’s IPO could generate significant interest among investors, and the company may choose to launch the IPO in 2023.
OYO Rooms IPO
Oyo, a significant player in the hospitality sector, was supposed to debut in the stock market last year after almost a decade since its establishment in 2013. Nevertheless, the company has faced several obstacles along the way, hampering its plans to go public. The IPO was expected to be valued at roughly Rs 8,000 crore and launched in early 2023. However, SEBI’s request for additional updates to be included in the Draft Red Herring Prospectus (DRHP) means that the IPO’s rollout is projected to be further delayed. As a result, the Oyo IPO may not be launched until the second half of 2023, and it is expected to be postponed by another quarter.
Ola Cabs, a ride-hailing aggregator, had planned to launch its IPO in the first half of 2022 but encountered delays. The company was prepared to file for an IPO last year, according to CEO Bhavish Aggarwal, but the board chose to postpone the move. Aggarwal had explained that the company’s ride-hailing business was profitable, and its investors were supportive of the listing strategy, but there was no urgency to list. He also mentioned that some people would be pleasantly surprised by the company’s market debut, unlike some of its peers in the consumer internet industry. However, in December 2022, the CEO confirmed that the company intends to go public in 2023.
Swiggy, an Indian food delivery company that achieved a valuation of over $10 billion in January 2022, had begun preparations to launch an IPO in early 2023, to raise $800 million to $1 billion. However, the company recently announced that it would lay off 250 employees as part of a restructuring exercise. To position itself as a logistics company and not just a food delivery service, Swiggy appointed independent directors to its board last year. The company also formally launched its IPO plans in 2022, enlisting investment banks JP Morgan and ICICI Securities as lead managers.
Byju’s highly anticipated IPO has been in the works since last year, and the company is expected to file papers for the IPO within the next few months. Last May, Byju’s raised $800 million in a pre-IPO round, which is expected to be its final private funding round before going public. Byju’s CEO, Byju Raveendran, invested $400 million of his funds in the company. The company is expected to have a valuation of approximately $40 billion when it goes public, and it is also finalizing plans for a $1 billion IPO of its tutoring business, Aakash Educational Services. Byju is projected to submit its Draft Red Herring Prospectus in January or February, with an anticipated IPO date of around August-September 2023.
In 2022, it was reported that Boat, an electronics brand that focuses on audio products and is owned by Shark Tank India judge Aman Gupta, had plans to launch an IPO of Rs 2000 crore, aiming for a valuation of $1.5-2 billion. However, the company decided to postpone its IPO plans in October 2022 and instead raise Rs 500 crore from Warburg Pincus and new investor Malabar Investments to expand its business. The company plans to raise the funds through convertible preferred stocks, which will be priced based on the IPO or the next funding round. The IPO is the more likely option, according to insiders familiar with the deal.
IPO trends in 2023
The IPO market is expected to remain strong in 2023, with many companies looking to go public to take advantage of the high valuations and investor appetite for new offerings. Technology and healthcare are expected to be the hottest sectors for IPOs, with a particular focus on companies in the software, biotech, and medical device spaces. Additionally, there is likely to be a continued trend toward SPACs (Special Purpose Acquisition Companies) as a vehicle for going public, although recent regulatory changes may lead to more traditional IPOs. Environmental, social, and governance (ESG) factors are also expected to play an increasingly important role in IPOs, as investors become more focused on sustainability and responsible business practices. The IPO market in 2023 is expected to be dynamic and active, with many high-profile offerings and a strong appetite from investors.
How to invest in an IPO
To invest in an IPO you need to follow the steps given below:
- Conduct thorough research on the company and its industry to evaluate its potential for growth and profitability. Look at financial statements, management teams, competition, and market trends.
- To invest in an IPO, you need to have a brokerage account with a brokerage firm that is underwriting the IPO. Contact your preferred brokerage firm to find out if they are participating in the IPO.
- You can now place an order for the IPO shares through your brokerage firm’s trading platform. You will need to provide information such as the number of shares you want to purchase and the price you are willing to pay.
After the IPO is closed, the underwriters will allocate the shares to the brokerage firms. The allocation process is based on various factors such as demand, order size, and availability of shares. If your order is filled, you will receive the shares in your brokerage account on the day the IPO starts trading on the stock exchange.
Benefits of investing in IPO
- Potential for higher returns compared to investing in established companies.
- Opportunity to invest in emerging and innovative companies with growth potential.
- Possibility of getting shares at a lower price before they are traded on the open market.
- Chance to participate in the early stages of a company’s growth and success.
- Ability to diversify an investment portfolio with new and exciting stocks.
- Access to a wider range of investment opportunities beyond traditional stock market offerings.
- Opportunity to invest in companies that align with personal values and beliefs.
- Possibility of receiving special discounts or incentives for being an early investor.
- Potential for long-term gains as the company grows and matures over time.
2023 is expected to be a big year for IPOs, with many high-profile companies going public and attracting investors’ attention. The companies mentioned above are just a few of the many that are expected to make headlines in the coming months. For investors looking to get in on the ground floor of these companies and potentially reap significant rewards, it’s important to carefully research. Investors who are well-informed and make prudent investment decisions might be able to leverage the opportunities presented by the fast-evolving and vibrant IPO market in 2023. The year is expected to bring a lot of excitement to the stock market.