NEW DELHI: India is gearing up for tech IPOs, including two worth more than $ 1 billion, as startups look to tap into a stock market that has proven resilient despite Covid-19.
Initial public offerings reflect the maturing of a generation of e-commerce and digital economy companies, say the bankers, many of which have grown rapidly during the pandemic as residents of affluent cities turn to them to buy dairy products. even medications.
On July 16, the operator of the digital finance app Paytm, One97 Communications Ltd., submitted a prospectus for what would be India’s largest initial public offering in local currency terms. The group offers services such as mobile wallet, loans and equity trading, and is backed by Jack Ma’s Chinese financial technology giant Ant Group Co. One97 aims to issue new and existing shares worth a total of up to 166 billion. rupees. equivalent to $ 2.23 billion.
Other companies considering IPOs include digital payments platform One MobiKwik Systems Ltd., which submitted its prospectus earlier this month, and supply chain and logistics service provider Delhivery Pvt., According to a spokeswoman for the company. business. Online cosmetics seller Nykaa E-Retail Pvt., API Holdings Pvt., Parent company of online pharmacy PharmEasy, and PB Fintech Pvt., Parent of insurance aggregator Policybazaar.com, are also considering listings, according to people familiar with your plans. .
“This is the first group of these companies to hit the public market” in India, said Kaustubh Kulkarni, director of investment banking for India at the local unit of JPMorgan Chase & Co.
Demand for the shares is likely to be strong, given the companies’ brand recognition, said Kulkarni, who is also the bank’s co-head of investment banking for South and Southeast Asia. “Most of these companies offer products, services or capabilities that millions, if not hundreds of millions, of customers use every day,” he said.
Last week, investors placed orders worth 38 times the shares offered by Zomato Ltd., India’s answer to DoorDash. INC.
The food delivery group raised around 94 billion rupees, the equivalent of $ 1.26 billion, and its shares will begin trading on July 27.
Some market watchers say that Indian technology has plenty of room to grow, as online consumption increases. Previous-stage investors have invested about $ 16 billion in Indian startups this year, creating 16 new unicorns (young private companies valued at $ 1 billion or more) according to data firm Venture Intelligence.
India’s unicorn population will rise to 150 by 2025 from the current 60, predicted Gaurav Singhal, India’s head of consumer technology at Bank of America Corp.
investment banking arm. Many will eventually look to float, he said, which will translate into a huge increase in market capitalization.
“India will see the creation of a market capitalization of between 300,000 and 400,000 million dollars in the Internet ecosystem in the next five years,” said Singhal.
The deals already underway show how India’s financial sector has been swept up in an international boom, even as the country records more than 30,000 new Covid-19 cases a day, among the highest daily counts in the world.
Already this year, India has hosted a flood of IPOs, joining a global surge driven in part by tech companies from other parts of Asia, such as Kuaishou Technology from China and Coupang from South Korea. INC.
India’s 22 IPOs in the first six months of 2021 generated $ 3.7 billion, a half-year record, according to Prime Database Group, a research firm in New Delhi. The shares of some recently listed companies are trading at twice their IPO price.
At the same time, Indian stock indices have exploded as investors bet on large publicly traded companies. The S&P BSE Sensex has hit a series of all-time highs, most recently on July 15, and international investors have invested about $ 7.7 billion in Indian stocks this year, official data shows.
Millions of individual Indian investors are trading stocks for the first time, again reflecting trends seen in the US and some other markets.
Harpreet Singh, a 23-year-old from the northern city of Pathankot, began venturing into the market last year while waiting for the opportunity to study abroad.
Relying on advice from videos on YouTube and Telegram, Singh said, he has lost money at times, but still finds trading stocks more attractive than landing a job in his hometown, where he said private sector work pays a mere 10,000 rupees a year. month. , equivalent to about $ 134.
“If you are aware of the stocks,” he said, “then in three or four months you can earn hundreds of thousands of rupees, sitting at home.”
Write to Shefali Anand at [email protected]
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