With 13 firms launching Initial Public Offerings (IPOs) in 2024, the year has established a landmark for Indian tech companies or startups. This represents a huge increase over prior years, with the numbers standing at 6 in 2023, 6 in 2022, and 10 in 2021. With over 50 businesses announcing plans to go public in the near future, the enthusiasm is projected to continue throughout 2024.
Key Highlights for 2024 IPOs
1. The 13 IPOs in 2024 cover a wide range of industries, including fintech, SaaS, logistics, proptech, EVs, e-commerce, foodtech, and traveltech. Collectively, these companies raised Rs 29,247.4 crore in capital, including Rs 14,672.9 crore ($1.75 billion) through fresh share issuance and Rs 14574.5 crore ($1.73 billion) through an offer for sale (OFS).
2. Swiggy (Rs 11,327.43 crore), Ola Electric (Rs 6,145.56 crore), FirstCry (Rs 4,193.73 crore), Digit Insurance (Rs 2,614.65 crore), and TBO Tek (Rs 1,550.81 crore) were the greatest initial public offerings.
3. In the SME space, Trust Fintech, TAC Security, and Menhood raised Rs 63.45 crore, Rs 29.99 crore, and Rs 19.46 crore, respectively.
Fresh Issues vs Offers for Sale (OFS)
-
Most IPOs had a mix of fresh issue components and offers for sale (OFS):
-
MobiKwik raised the full capital through a new offering, while Ola Electric, BlackBuck, and Digit Insurance followed suit, indicating a need for growth funding.
-
Unicommerce, Ixigo, Awfis, TBO Tek, Swiggy, and FirstCry all had a strong OFS component, highlighting shareholder exits.
IPO Subscription
-
Unicommerce was the most popular main board IPO, with 168.39 times the subscription, followed by MobiKwik (119.38 times), Awfis (108.56 times), Ixigo (98.34 times), and TBO Tek (86.7 times).
-
BlackBuck (1.86 times) and Swiggy (3.59 times) had moderate investor interest despite their big IPO sizes. TAC Security's IPO was subscribed 280.68 times, while Menhood and Trust Fintech received 157.59X and 72.26X subscriptions, indicating a significant market for SME equities.
Listing Gains
TAC Security set a standard with a listing increase of 173.58%, followed by Unicommerce (117.59%), MobiKwik (57.71%), and TBO Tek (55%). Ixigo, Trust Fintech, FirstCry, and Menhood all witnessed 30-50% listing increases, but Ola Electric listed flat with no listing gain, indicating a cautious market mood for the firm.
Upcoming IPOs: A Promising Pipeline
Going forward, around 50 firms have declared their ambition to go public in the coming months or years, with a handful still seeking SEBI approval. This pipeline comprises firms in e-commerce, financial, and proptech (mostly co-working). If the trend continues, 2025 could outperform 2024, as numerous firms, including Bluestone, Ecom Express, PhysicsWallah, InCred Finance, Aye Finance, Ola (mobility), PayU, Ather, boAt, Pine Labs, and Zepto, are expected to be listed or IPO ready in the next months.
Conclusion
While the increased performance in public markets is a tremendous validation for the India story, particularly for VCs, it is critical that these firms do not undervalue public investors. With the retail segment expanding rapidly due to mutual funds and direct involvement, regulators are already raising concerns about the 'quality' of issues entering the market. The additional compliance expenses and regulations for firms ensure that any firm that lists has a greater awareness of its sector and peer group. That is why listings by industries that did not even exist a decade ago are still finding their 'real value', whether for Zomato or Mobikwik today. Firms have effectively avoided paying high premiums in a market flooded with liquidity and a scarcity of new offerings until recently.
If these shares fall below their issue price in a year owing to poor performance, the impact on the next generation of entrepreneurs might be severe. However, for the time being, most have done enough to raise investor expectations, paving the way for entrepreneurs to follow suit. Expect 2025 to be a prosperous year as well. Expect 2025 to be a prosperous year as well. And, while one expects the offer-for-sale component to remain high on the agenda, is it too much to believe that corporate governance issues such as the issuance of cheaper stock weeks before the IPO will be addressed? One can hope, we suppose.
