Startup IPOs To Buck Covid Fears In 2022, Experts Bullish About Public Listings

With quite a few new-age companies lined up to hit the public markets in 2022, market analysts are bullish about the prospective initial public offerings (IPO) in the year ahead, although concerns of a resurgent Covid-19 and the Omicron variant loom large.

At least 16 startups are expected to go public in 2022, out of which three have received SEBI’s approval, and six are yet to receive SEBI nod for the IPO. 

Amidst the recent IPO rush, the weak listing of companies such as Paytm, Fino Payments and RateGain have also raised concerns over prospects of upcoming offers of tech-backed companies. The rising cases of the Omicron variant of Covid-19 has also impacted recent offers as it has subdued the overall market sentiments.

Experts, however, are of the view that the correction in the markets and the weak sentiments are short term phenomena and the outlook for the startups IPOs in the coming year is positive.

Rahul Sharma, cofounder, Equity99, said that the startups in sectors such as in the fintech space, wherein the government also has been trying to give a major push, are likely to witness a good performance in the stock markets.

He said that the market would also wait for the upcoming Union Budget, which may boost the stock markets and public offers.

Manan Doshi, Cofounder of Unlisted Arena, said, “Post a weak listing of Paytm due to high valuation, now companies have turned a bit conservative regarding valuations and hence we should be seeing good listings in the year ahead. The pipeline of IPOs, including those of startups is quite strong and the outlook for these offers also is positive.”

Noting that India is witnessing the emergence of a new unicorn every 9 days, Doshi said that investor interest is still robust for startups in the country. So far 42 startups have turned unicorns in 2021.

Amit Pamnani, Chief Investment Officer & DGM for Investment Banking at Swastika Investmart said that the offers of Mobikwik, PharmEasy and Delhivery are most likely to open in January 2022.

If 2021 is a pioneering year in terms of startup IPOs, 2022 would be the year when this new phenomenon of startups going public reaches new heights with many unicorns and other online businesses lined up for the same.

The other giants in India’s startup ecosystem which are slated to go public are hospitality unicorn OYO, ecommerce major Snapdeal, mobility unicorn OLA, edtech giant BYJU’s.

Walmart-backed Flipkart and foodtech major Swiggy are also expected to hit the stock markets next year.

The bandwagon of startup IPOs started in March this year with EaseMyTrip’s IPO, followed by gaming company Nazara and Zomato in July.

Overall, the offers, however, received a mixed response. Nazara, EaseMyTrip, Zomato were listed at a premium in the first half of the year and those listing gains boosted the market’s confidence. 

But since then, only Nykaa, Policybazaar and MapmyIndia have been listed at a premium. CarTrade was listed at 7.29% discount, while Fino Payments Bank saw a discount of 5.5% and Paytm, India’s biggest IPO, saw a listing with a 9% discount. Travel tech startup RateGain got listed on the bourses earlier this month with a 15% discount.