Initial Public Offering (IPO) is a way for a company or a unicorn to raise funding from the general public instead of opting for fundraising from angel investors. Here, the firm offers a share of its company to the general public at a price value. It is like calling the general public to give money to the company against some shares.
It can be tantamount to crowdfunding but such funding has to be done by meeting the prerequisites set by the regulating body- SEBI ( Security Exchange Board Of India). The company uses the proceeds to expand and grow its business.
But, it is essential that a key investor be aware of the financial position of the company and where the company is going to use the proceeds. Fundamentals Are Basics! Is it to pay off the debts or going to use it to open new businesses? IPO is dealt in the primary market. But, once the company is listed, they enter a secondary market where the investors buy and sell the already owned shares.
It is essential that you carefully read the prospectus of the company and make decisions accordingly. It is not important that all IPOs are rewarding. Before entering into an IPO, you must check the fundamentals of the company and choose an IPO according to your risk appetite.
What are the upcoming IPOs you can bet on in 2021?
Disclaimer: The intent is to provide an overview of the upcoming IPOs, before selecting any IPO read all the documents carefully.
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Paytm
Indeed the IPO of Paytm is the most talked about because of various reasons. Despite the company not enjoying the positive profit, it is already ready to make its debut in the financial market. As per the result of the FY20-21, Paytm’s profit after tax summed up at a negative of 17,010 Million. But, it is not to forget that Paytm has a Stronghold on brand identity with its brand valuing at US$6.3 billion. It has a large customer base with 333 million total customers, 114 million yearly transacting users, and 21 million registered merchants.
The issue size of the shares would aggregate to ₹16,600.00 Cr. It is expected that the IPO will enter the primary market in October this year.
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Arohan Financial
The RBI has licenced Arohan Financial Services as an NBFC-MFI, and its operations are overseen by them. Arohan Financial Services is a microfinance lender located in Kolkata. It submitted a preliminary red herring prospectus for its initial public offering (IPO) with the capital market regulator, Sebi, on February 14. It aims for the fresh issuance of Rs 850 crore and the sale of 2,70,55,893 equity shares are included in the public offering. The business intends to raise Rs 150 crore through a pre-IPO placement, according to the DHHP. Each share has a face value of Rs.10, however, the IPO’s price band has not been disclosed. The precise date of the most recent IPO’s first public offering is unclear.
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Policy Bazaar
Policybazaar has filed documents with the Securities and Exchange Board of India (SEBI) for a massive IPO to raise Rs 6,017 crore.
Info Edge, Premji Invest, Softbank, Tiger Global, and Temasek are among the investors behind the internet insurance marketplace, which is aiming for a valuation of $5.5 billion to $6 billion. The firm claims to have sold over 1.1 million insurance policies, accounting for every second term policy offered in India and 25% of all outstanding life insurance plans. It receives over 100 million visitors per year and sells over 6 lakh insurance each month.
For FY 2020, the firm recorded revenue of Rs 515 crore and costs of Rs 737 crore. PB Fintech Private Limited, the parent company of Policybazaar and Paisabazaar (the financial advice arm), reported Rs 854 crore in income, Rs 1,149 crore in costs, and Rs 304 crore in losses for FY 2020. Employee perks and advertising accounted for 45 per cent and 39 per cent of the company’s expenses, respectively.
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Nykaa
According to sources in the media, India’s Nykaa is planning to apply for an IPO that may value the company at more than $4 billion. Nykaa, a fashion store, plans to raise Rs 5,000 crore. If we talk about the company’s performance, then, As of 2015 Nykaa has established an offline presence as well and has within its fold 80 stores that are home to high-end brands including but not limited to Chloé, Dior, Elie Saab, Jimmy Choo among others. In 2019, Nykaa acquired the clothing company Twenty Dresses in a bid to secure a foothold within the world of apparel. In 2021 it acquired Pipa Bella, an affordable fashion jewellery brand designing contemporary pieces.
Nykaa hopes to establish its offline expansionary goals this year with each of these purchases, to open 40 additional locations in the following years.
In terms of statistics, Nykaa’s revenues in FY 2020 surpassed those of the previous year, totalling INR 1,860 crore, but its profit remained stable at the same level. Its net profit for FY 2019 was INR 2.31 crores, while its profit before taxes for FY 2020 was INR 94 crores.
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Aditya Birla Sun Life AMC
According to various estimates, the IPO valuation of Aditya Birla Sun Life AMC will be greater than Rs 24,000 crore. According to the draft documents, the planned IPO is fully an offer for sale with two promoters—Aditya Birla Capital and Sun Life (India) AMC Investments—divesting their stakes in the asset management business.
As per Economics Times, This IPO of up to 3.88 crore equity shares includes Aditya Birla Capital’s offer for sale of up to 28.51 lakh equity shares and Sun Life AMC’s offer for sale of up to 3.6 crore equity shares. The planned sale of equity shares by Aditya Birla Capital and Sun Life India in the IPO will amount to up to 13.50 per cent of Aditya Birla Sun Life AMC’s paid-up share capital.
The IPO is projected to fetch Rs 1,500-2,00 based on the typical industry price earning ratio. The IPO date has yet to be declared.
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PharmEasy
Pharmeasy’s parent firm API Holdings, which operates in the country’s fast-paced and ever-growing online pharmacy market, has begun to examine the prospect of going public through an initial public offering (or IPO). This IPO, which aims to raise INR 3,000 to INR 3700 crores, will see the firm valued at over INR 21,800 crores, or $3 billion.
This IPO is scheduled to debut in the second half of 2022, if not before the end of 2021. Almost a dozen investment banks had expressed interest in acquiring this company’s IPO mandate as of last week. The firm intends to grow by utilising the expansion processes. Dhaval Shah and Dharmil Sheth launched Pharmeasy in 2015, and it now has 80,000 pharmacies under its umbrella. By the end of the year, it wants to have 1.2 million pharmacies in 100 cities across the country.
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MobiKwik
MobiKwik, the world’s largest digital payments company, has filed a DRHP with SEBI to raise Rs 1900 crore through an IPO. The business would generate Rs. 1500 crores via the sale of primary shares, according to the draft document. It would also generate up to Rs. 400 crores through the sale of secondary shares owned by current shareholders.
The top mobile wallet and Buy Now Pay Later service provider is well-known for its extensive range of services and flexible payment methods. Along with its subsidiaries Zaakpay and MobiKwik Zip, this firm strives to make online payments easier for its customers. With this impending IPO, MobiKwik intends to raise its valuation to $1 billion.