Investors are eagerly awaiting five initial public offerings (IPOs) this week, including the much-anticipated one from Tata Technologies Ltd. is expected to rise above ₹7,300 crore together.
But a more interesting group of at least nine technology start-ups are polishing their pitches, preparing to take advantage of the markets after next year’s general election.
Tech startups looking to raise over $2 billion in 2024 (approx. ₹16,600 crore at the current exchange rate), bankers and company executives said. The last time India saw a similar surge of technology startups in the market was in 2021, when Nazara Technologies, Zomato, Policybazaar and Nykaa sold shares in IPOs.
“On the supply side, some companies are considering IPOs as an alternative way to exit their investors. On the demand side, the verdict of the upcoming state elections and the outcome of the general election will affect the overall market sentiment and, consequently, the underlying market,” said Pranav Haldea, managing director, Main Database Group. For years in recent times, the underlying market has always been relatively unclear before the elections, Haldea added.
The results of the state elections starting in December will be a guide to sentiment and may provide insight into how the general election will play out, experts said.
“There could be a small window before the general elections, which some of the companies that have already filed documents with Sebi (markets regulator Securities and Exchange Board of India) and received approval will look to take advantage of,” a said the head of equity capital markets at a leading domestic investment bank, requesting anonymity.
Razorpay and Groww are working to change their domicile to India before listing. Last week, Ola Electric Mobility said it has converted itself into a public company as it prepares for an IPO.
Ola Electric is looking to launch its IPO before March, a person familiar with its plans said. “It’s an aggressive timeline,” said one of the people cited above. The company named Goldman Sachs and Kotak Mahindra Capital Co., among others, to manage the issue.
Ola Electric’s bankers are rushing to file the draft share sale papers by the end of this month, one person familiar with the matter said, adding that meeting the March deadline will be difficult, and the IPO could only happen after after the elections.
FirstCry and Swiggy, which have already appointed bankers, are likely to file draft papers in the first quarter of 2024. Oyo, which has already filed its documents twice, is yet to get Sebi’s nod. OfBusiness, Infra.Market, Lenskart and PhonePe are yet to hire bankers.
“These companies are talking to bankers about potential IPO plans but they haven’t hired yet [them]” said one of the people mentioned above.
It takes three to five months for companies to prepare share sale papers, get regulatory approval, conduct road shows and price IPOs. Therefore, they must start work in the first quarter of 2024 to be able to hit the markets when the elections are over.
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Updated: 20 November 2023, 12:13 AM IST
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