The Indian market is home to some of the world’s most promising startups and has been a leader in attracting global investors. This week, two major IPOs from India, Paytm and Zomato, have set the stage for a wave of other companies that will list on Indian stock exchanges.
The 2023 ipo list is a prediction that the number of Indian tech companies going public will increase in 2023. This prediction comes from the recent IPO’s of Paytm and Zomato.
NEW DELHI—India is preparing for a slew of tech IPOs, including two worth more than $1 billion, as entrepreneurs seek to cash in on a stock market that has held up well despite Covid-19.
According to bankers, the initial public offerings represent the maturation of a generation of e-commerce and digital-economy companies, many of which have grown rapidly during the pandemic as well-heeled city dwellers turn to them for everything from milk to medicines.
On July 16, One97 Communications Ltd., the company behind the Paytm digital-finance app, filed a prospectus for what would be India’s largest IPO in terms of local currency. The company, which is backed by Jack Ma’s Chinese financial technology giant Ant Group Co, provides services such as a mobile wallet, loans, and stock trading. One97 intends to raise funds by issuing new and existing shares worth up to 166 billion rupees ($2.23 billion).
According to a company spokeswoman, other companies considering IPOs include digital payments platform One MobiKwik Systems Ltd., which filed its prospectus earlier this month, and logistics and supply-chain services provider Delhivery Pvt. According to people familiar with their plans, online cosmetics retailer Nykaa E-Retail Pvt., API Holdings Pvt., the parent company of online pharmacy PharmEasy, and PB Fintech Pvt., the parent company of insurance aggregator Policybazaar.com, are also considering listings.
According to Kaustubh Kulkarni, head of investment banking for India at JPMorgan Chase & Co., “this is the first set of these companies coming to the public market” in India.
Given the companies’ well-known brands, Mr. Kulkarni, who is also the bank’s co-head of investment banking for South and Southeast Asia, expects strong demand for the shares. “Most of these companies offer products, services, or capabilities that hundreds of millions, if not billions, of customers use on a daily basis,” he said.
Investors placed orders worth 38 times the value of Zomato Ltd.’s shares, India’s answer to DoorDash Inc., last week. The food-delivery company raised around 94 billion rupees ($1.26 billion), and its stock is set to begin trading on July 27.
As more consumption shifts online, some market watchers believe Indian tech has plenty of room to grow. According to data company Venture Intelligence, early-stage investors have invested nearly $16 billion into Indian businesses this year, resulting in the creation of 16 new unicorns—young private firms valued at $1 billion or more.
According to Gaurav Singhal, director of India consumer technology at Bank of America Corp.’s investment banking arm, India’s unicorn population will grow to 150 by 2025, up from 60 currently. Many would ultimately want to float, resulting in a significant rise in market capitalisation, he said.
In the next five years, India’s internet ecosystem will generate $300 billion to $400 billion in market capitalization, according to Mr. Singhal.
Even as India registers more than 30,000 new Covid-19 cases each day, one of the highest daily numbers in the world, the transactions currently underway demonstrate how the country’s financial industry has been caught up in an international boom.
India has already seen a flurry of IPOs this year, following a worldwide trend driven in part by Asian tech firms like China’s Kuaishou Technology and South Korea’s Coupang Inc.
The Paytm digital-finance app’s operator has filed a prospectus for what would be India’s biggest IPO in terms of local currency.
Dhiraj Singh/Bloomberg News photo
According to Prime Database Group, a New Delhi-based research company, India’s 22 IPOs in the first half of 2023 raised $3.7 billion, a record half-year haul. Some freshly listed businesses’ shares are selling at double their initial public offering price.
Simultaneously, Indian stock indices have risen as investors place bets on large publicly traded businesses. The S&P BSE Sensex has set a string of new highs, most recently on July 15, and government data indicates that foreign investors have poured $7.7 billion into Indian stocks this year.
For the first time, millions of ordinary Indian investors are trading equities, following patterns observed in the United States and other markets.
Harpreet Singh, a 23-year-old from Pathankot in northern India, began dabbling in the market last year while waiting to study overseas.
Mr. Singh said that he had lost money following advice from videos on YouTube and Telegram, but that he still prefers trading stocks to obtaining a job in his hometown, where private-sector employment pays just 10,000 rupees a month, or about $134.
“If you know how to trade stocks,” he added, “you may make hundreds of thousands of rupees while sitting at home in three to four months.”
Shefali Anand can be reached at [email protected]
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