MUMBAI: After a surge in the IPO market over the last two years, Indian startups are finding it difficult to tread the path to Dalal Street. The US-Iran war has thrown a wrench into IPO plans with many companies delaying listing timelines and being slow to file draft papers.
PhonePe has paused its $1.3 billion initial public offering (IPO) that was scheduled to launch sometime in April, and Flipkart is also understood to be in no hurry to go ahead with IPO preparations amidst choppy markets. Even with a few big issues for companies like Zepto and Oyo in the pipeline, these are unlikely to hit stock exchanges if markets remain volatile, impacting IPO fundraising more broadly, industry executives said. “Only six New Era companies have been listed so far this year, of which four were listed below their issue price.
The returns it generated for investors were lower compared to the gains investors made through technology IPOs last year.” said Sneha Poddar of Motilal Oswal Financial Services.
Amid difficult market conditions, markets regulator Sebi has extended the validity of IPO approvals by six months to September this year. Commercial bankers expect this to be extended for another six months.
Overall, there have been only about 20 major IPOs so far this year, with companies raising less than Rs 20,000 crore in the first five months of the year versus more than Rs 27,000 crore in each of the last two years.
Issuance volumes this year were not very large, which represents a sharp contrast with last year, Poddar said, adding that major companies targeting high valuations and large listings would not launch IPOs unless there was investor appetite for large issuances.
Shares of new age companies Amagi Media Labs, Shadowfax and Fractal Analytics were listed under IPO pricing on stock exchanges this year while Aye Finance had a flat listing. “Investors have become more selective and value sensitive. As a result, some startups are reevaluating timelines, refining narratives, and waiting for greater visibility before entering public markets.” said Raghav Gupta, Joint CEO at IIFL Capital “One can expect that companies that may have considered listing in the next few months may pull back by a quarter.” Aon’s Jang Bahadur Singh told TOI.(With inputs from Aditi Bhardwaj)