In retrospect, the year 2021 will be recognized as a watershed moment in the Indian startup ecosystem, as well as the frenzy among new-age enterprises to ditch their private brands and go public. 2021 opened up a whole new avenue for investments, not just for startups, but also for the public markets and the millions of ordinary investors.
The Indian Public Markets have come a long way from concerns about loss-making software startups going public to acceptance of unconventional growth-based valuing of enterprises.
The recent IPO filings of new-age tech businesses, according to SEBI Chairman Ajay Tyagi, proved that the Indian market is “maturing.”Zomato’s record-breaking IPO in July was a watershed moment for India’s stock markets and startup ecosystem. Nykaa, Paytm, and Policybazaar were among the first to launch.
Freshworks, the homegrown customer engagement unicorn, also made history in the history of Indian startups when it debuted on the NASDAQ in the United States. In total, nine firms have gone public in 2021, raising $5.86 billion (at INR 75.76 per dollar). In the local market, these include INR 43,678 Cr ($5.76 Bn) and Freshworks’ $100 Mn IPO in the United States. RateGain and MapmyIndia are both expected to be listed in the coming weeks. RateGain hopes to raise INR 1,336 crore ($176 million), while MapmyIndia hopes to raise INR 1,040 crore ($137.28 million).
If 2021 is a watershed moment for startup IPOs, 2022 will be the year when the new phenomenon of startups going public reaches unprecedented heights, with a slew of unicorns and other online businesses lining up to follow suit.
List of Top 5 Startup Companies To Invest In 2022
Here is a look at the companies which are expected to list on the stock markets going ahead:
1. Indian Logistics Unicorn Delhivery
The logistics unicorn from Gurugram filed a draught red herring prospectus (DRHP) in November to raise INR 7,460 crore. A fresh issue of shares worth up to INR 5,000 crore and an offer for sale (OFS) worth up to INR 2,460 crore would be part of the deal.
Masayoshi Son’s SoftBank is expected to sell shares worth INR 750 crore under its DRHP, while Carlyle Group is expected to sell shares for INR 920 crore. Times Internet would sell 330 crore rupees worth of stock.
Kapil Bharati, Mohit Tandon, and Suraj Saharan, three co-founders, will sell shares worth INR 14 crore, INR 40 crore, and INR 6 crore, respectively. Sahil Barua, co-founder, and CEO will not sell his shares in the proposed IPO.
According to the SEBI website, the application is under process. The IPO is expected to hit the market in the first quarter of 2022 at a valuation of $4.5 Bn – $5 Bn.
2. Hospitality Unicorn OYO
On October 1, Oravel Stays, the parent company of hospitality unicorn OYO, filed for an initial public offering (IPO) worth INR 8,430 crore, which will include new shares worth INR 7,000 crore and an offer for sale in which the existing investors are expected to offload their shares worth INR 1,430 crore.
Ritesh Agarwal founded the hospitality behemoth in 2013, and investors include Masayoshi Son’s SoftBank, NASDAQ-listed Airbnb, Lightspeed Venture Partners, and Innovate Capital.
SoftBank, a long-time investor and the largest shareholder in the hospitality unicorn OYO, will sell a portion of its investment in the company’s anticipated IPO (IPO).
SoftBank’s SVF India Holdings (Cayman) Ltd owns 46.62 percent of Oravel Stays, the hospitality unicorn’s parent business. SVF India Holdings will dispose of shares worth up to INR 1,328.5 crore through the offer for sale, according to OYO’s DRHP.
3. Automobile Marketplace Droom
Droom, an online vehicle marketplace, submitted a draught prospectus to collect INR 3,000 crore through an IPO last month. The IPO involves a fresh offering of shares worth up to INR 2,000 crore and a 1,000 crore offer for sale.
The company plans to invest approximately INR 1,150 crore in organic growth activities and approximately INR 400 crore in inorganic expansion projects. The business also stated that it will not use more than 25% of the gross proceeds from the new offering for general corporate purposes.
The company plans to spend approximately INR 1,150 crore on organic growth activities and approximately INR 400 crore on inorganic expansion initiatives. The business also stated that it will not use more than 25% of the gross proceeds from the new offering for general corporate purposes. The business joined the unicorn club in July after concluding the first phase of its $200 million IPO expansion fundraising round.
It has not yet acquired SEBI permission but is scheduled to do so and go public between January and March 2022.
4. Fintech Unicorn MobiKwik
Even after gaining SEBI approval on October 7, the IPO of One MobiKwik Systems, the parent company of Delhi NCR-based MobiKwik, has been postponed. The IPO was supposed to go live around Diwali this year.
According to market analysts, the anticipated public offering is likely to have succumbed to investor nervousness following Paytm’s initial public offering. The Morning Context reported on November 15 that Eastspring Investments and Nomura, two institutional investors who had pledged to invest in the startup’s IPO, had backed out.
It was claimed by persons familiar with the proceedings that, in addition to expensive valuations, investors are skeptical of MobiKwik’s ability to compete in India’s congested fintech industry.
The INR 1,900 crore IPO consists of a new issue of equity shares worth up to INR 1,500 crore and a sale of existing shares worth up to INR 400 crore to certain existing shareholders.
According to the DRHP, an offer of sale (OFS) includes INR 9.9 crore from American Express, INR 68.9 crore from Bajaj Finance, INR 11 crore from Cisco Systems, INR 94 crore from Sequoia, INR 24 crore from Treeline Asia, and INR 111 crore from Bipin Preet Singh and INR 78 crore from cofounder Upasana Taku.
5. Sachin Bansal’s Navi Technologies
Navi Technologies has begun the process of being publicly traded. According to a recent Moneycontrol story, the company has hired Axis Capital, ICICI Securities, BofA Securities, and Credit Suisse as IPO consultants, with more banks possibly joining later.
The corporation plans to file its DRHP within the current fiscal year (FY22).
Navi made a profit of INR 71 Cr in the fiscal year ending March 31, 2021, a major turnaround after a deficit of INR 8 Cr in the previous year.
From INR 221 Cr in FY20 to INR 780 Cr in FY21, the three-year-old startup’s overall income increased by 252 percent. While the Mumbai-based startup’s other income dropped from INR 22 crore in FY20 to INR 9 crore in FY21, revenue from operations increased to INR 779 crore in FY21, up from INR 198 crore in FY20.
Navi is a lending, general insurance, mutual funds, and microfinance company founded by Bansal and his former Flipkart colleague Ankit Agarwal in 2018.
Navi debuted a monthly subscription EMI-based insurance product in June this year, rather than the traditional annual fee that insurance carriers charge. It also started investing in mutual funds earlier this year.
Navi Mutual Fund has submitted draught paperwork to the Securities and Exchange Board of India (SEBI) in preparation for the launch of its blockchain index fund of funds (FoF).
Navi is likewise hoping for a universal banking licence from the Reserve Bank of India.
The DRHP is planned to be filed in the first quarter of 2022.
Conclusion
The IPO market has had a banner year this year. At the same time, venture capital investing in still-private firms has reached new highs. As many of these well-capitalized firms exit the market, we believe 2022 will be another strong year for stock market debuts.
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