Tracxn IPO Subscribed 23% On Day 1; QIB Portion Remains Untouched

The initial public offering (IPO) of market intelligence startup Tracxn Technologies, which opened on Monday (October 10), saw a tepid response on the first day. The IPO was subscribed 23% at the end of the day, while the retail portion saw the maximum subscription at 1.23 times.

According to data available on the BSE, the qualified institutional buyers’ (QIBs) portion remained untouched. 

Out of the over 58 Lakh shares reserved for non-institutional investors (NIIs), 1.1% was subscribed by NIIs who placed bids for more than INR 10 Lakh, while small NIIs (bid between INR 2 Lakh – INR 10 Lakh) subscribed to 2.5% of the NII portion. Together, the NII portion was subscribed 0.04 times.

Overall, Traxcn IPO received bids for only 49.56 Lakh shares as against 2.12 Cr shares on offer. 

The price band for the IPO is fixed at INR 75 – INR 80 per share and it will remain open for two more days. 

Founded by former venture capitalists Abhishek Goyal and Neha Singh, the SaaS tool that profiles companies announced an INR 309.36 Cr IPO consisting entirely of an offer for sale (OFS).

Founders Goyal and Singh, Flipkart’s Binny Bansal and Sachin Bansal, Elevation Capital, Sequoia India, Freshworks’ Girish Mathrubootham, Delhivery founder Sahil Barua, and Accel India are among the investors who are offloading shares in the IPO.

The startup raised INR 139 Cr from 11 anchor investors ahead of the IPO.

The anchor round investors included a mix of domestic and foreign investors such as India Acorn, BNP Paribas Arbitrage – ODI, Ashoka India Equity Investment PLC, Tara Emerging Asia Liquid Fund, Kotak Offshore (India Midcap Fund), Nippon Life, ICICI Prudential, Whiteoak Capital Flexi Cap Fund, Kotak Pioneer Fund, Reliance General Insurance and Motilal Oswal.

Market Sentiment For Tracxn IPO

There are mixed views amongst brokerage firms on the Tracxn IPO. While Choice Broking has given an ‘avoid’ call due to the company’s loss-making nature, low growth avenues, stiff competition, and pure OFS component, Arihant Capital suggested that IPO has been fairly priced and has given a ‘buy’ rating.

ICICI Direct has not rated the IPO, while Religare Securities has given a ‘neutral’ rating to the Tracxn IPO. 

Tracxn earned a subscription-based revenue of INR 43.8 Cr in FY21 and incurred a loss of INR 5.3 Cr.

On its listing on the BSE and the NSE, Tracxn will join the list of over 10 Indian startups which went public in the past two years. 

While the funding boom in 2021 saw IPOs becoming a craze in the Indian startup ecosystem, the poor listing of some of them, along with the pressure on the share prices in 2022 amid the global economic slowdown, has resulted in many startups deferring or cancelling their IPO plans. Delhivery is the only Indian startup to have listed on the exchanges in 2022 so far.

Similar to Tracxn, Delhivery IPO was also off to a slow start on Day 1. However, it was subscribed 1.63 times on the close of the IPO window and listed at a premium of 1.7% on the issue price at INR 487 on the exchanges.