As Market Volatility Hits, IPO-Bound Startups Wait For The Storm To Pass

As Market Volatility Hits, IPO-Bound Indian Tech Startups Wait For The Storm To Pass

SUMMARY

Unlike 2021, there has hardly been any major listing of tech startups on the stock exchanges in the first four months of 2022

The roadmap for upcoming IPOs is unclear due to market volatility, tightening of monetary policies globally and persistent fear of the next wave of COVID

After the recent decline in shares of 11 listed startups, many of the IPO-bound startups are waiting for the market sentiment to improve or are mulling reducing the offer size

The year 2021 saw 11 Indian startups list on the bourses and get into the big league. Overall, Indian startups raised more than $2.7 Bn through mega anchor investments and pre-IPO rounds and $7.3 Bn through IPOs in 2021. However, there have been no major listings of startups in 2022 till now.“Normally IPOs take about 12 months of planning and execution and by the time it’s ready for IPO, the market dynamics change and it’s difficult to time it. So at that point, the choice is between lower valuation and a smaller issue against a probability of the IPO failing – so naturally, they choose the former,” the expert added.

Most of the listed startups have failed to deliver returns after their listing on stock exchanges, and have seen sharp decline in their share prices. The likes of Paytm and Zomato have been reduced to a third of their peak valuations. While some of them have rallied to reach closer to their pre-IPO valuations, overall, it has not been a good outing for the Indian startups on the stock exchanges.