Tech-powered startups’ IPO rush ready to kick off

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Recent reports suggest that at least 50 digital technology companies will be listed on the Indian bourses over the next few years. According to Atul Mehra, managing director — investment banking, JM Financial, there is huge investor appetite for such new-age businesses, which are using technology to grow rapidly, in India and across global markets.

He further adds that IPOs of such companies will not only add significantly to India’s market capitalisation but also notably improve the free float as most of these companies have 90% of their cap tables as investors, which in turn will attract more funds towards India.

The Rs 9,375 crore initial public offer of online food delivery platform Zomato will open for subscription on Wednesday. This is the first large company from the Indian startup basket to launch an IPO. Other technology-enabled companies such as beauty e-tailer Nykaa, online insurance aggregator PolicyBazaar, fintech firm Paytm, e-commerce logistics firm Delhivery, eyewear retailer Lenskart, and digital payments startup Mobikwik among others are in various stages of their IPO plans.

Atul Mehra further pointed out that the four key drivers that continue to fuel the IPO euphoria in India are good performance of stocks, strong liquidity, and stellar returns from most of the IPO listings, and increased retail and HNI participation.

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