Tech IPO boom arrives in unicorn-rich India

Initial public offerings reflect the maturing of a generation of e-commerce and digital economy businesses, bankers say, many of whom have grown rapidly during the pandemic as well-to-do city dwellers look to them when they shop. products ranging from milk to medicines.

On July 16, the operator of the digital finance app Paytm, One97 Communications Ltd., filed a prospectus for what would be India’s largest IPO in terms of local currency. The group offers services such as a mobile wallet, loans and stock trading, and is backed by Chinese fintech giant Jack Ma, Ant Group Co. One97 aims to issue new and existing shares of a total value of up to 166 billion rupees, the equivalent of 2.23 billion dollars.

Other companies considering IPOs include digital payment platform One MobiKwik Systems Ltd., which filed for its prospectus earlier this month, and logistics and supply chain service provider Delhivery Pvt. ., according to a spokesperson for the company. Online cosmetics seller Nykaa E-Retail Pvt., API Holdings Pvt., The parent company of online pharmacy PharmEasy, and PB Fintech Pvt., The parent company of insurance aggregator, are also considering inscriptions, according to people familiar with their plans. .

“This is the first group of such companies to enter the public market” in India, said Kaustubh Kulkarni, head of investment banking for India in the local unit of JPMorgan Chase & Co.

Demand for the shares is expected to be strong, given the companies’ brand awareness, said Mr. Kulkarni, who is also co-head of the bank’s investment banking services for South and South Asia. -East. “Most of these companies offer products, services or capabilities that millions, if not hundreds of millions of customers use on a daily basis,” he said.

Last week, investors placed orders worth 38 times the shares offered by Zomato Ltd., India’s response to DoorDash Inc. The food delivery group raised around 94 billion rupees, l ‘equivalent of $ 1.26 billion, and its shares are expected to start trading in July. 27.

Some market watchers say Indian technology has a lot of room to develop as consumption moves online. Earlier stage investors invested around $ 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 grow to 150 by 2025 from 60 now, predicted Gaurav Singhal, India’s head of consumer technology in the investment banking arm of Bank of America Corp. Many will eventually seek to float, he said, resulting in a sharp increase in market capitalization.

“India will see between $ 300 billion and $ 400 billion of market capitalization creation in the internet ecosystem over the next five years,” Singhal said.

The deals already underway show how India’s financial sector has been swept away by an international boom, even as the country registers more than 30,000 new cases of Covid-19 per day, among the highest daily counts in the world.

Already this year, India has hosted a wave of IPOs, joining a global wave fueled in part by tech companies from elsewhere in Asia, such as Kuaishou Technology in China and Coupang Inc in South Korea.

India’s 22 IPOs in the first six months of 2021 brought in $ 3.7 billion, a semi-annual record, according to Prime Database Group, a New Delhi-based research firm. The shares of some recently listed companies are trading at twice their IPO price.

At the same time, Indian stock indices have skyrocketed as investors bet on large listed companies. The S&P BSE Sensex hit a series of records, most recently on July 15, and international investors have invested around $ 7.7 billion in Indian stocks this year, according to official data.

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, 23, from Pathankot in the north of the country, started to enter the market last year while waiting for the chance to study abroad.

Relying on advice from videos on YouTube and Telegram, Mr Singh said he has lost money at times, but still finds it more attractive to trade stocks than to find a job in his hometown. , where he said working in the private sector pays barely 10,000 rupees per month. , equivalent to about $ 134.

“If you have knowledge of stocks,” he said, “then in three to four months you can make hundreds of thousands of rupees sitting at home.”

(This story was posted from a feed without editing the text.)

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