SUMMARY
After the lull of 2022, when only three startups went public, the year 2023 saw five new-age tech companies listing on the bourses
Among the new-age tech startups, ideaForge’s IPO stood out in 2023 as the drone startup listed at a substantial 94% premium to its issue price
Although subdued, the IPOs of Mamaearth and Yatra were also quite noteworthy among the new-age tech startups
As the year 2023 approaches its end, it is now safe to say that listed Indian startups have largely surpassed the challenges of the previous year and made a smart recovery. The situation has also improved when it comes to the initial public offerings (IPOs) of startups.
The IPO sentiment for new-age tech startups remained quite underwhelming in 2022, with only three companies – Delhivery, Tracxn Technologies, and DroneAcharya – getting listed on the bourses. In contrast, 2023 saw a clear recovery as five startups went public during the year.
This was in line with the overall improvement in the IPO market. According to the BSE data, 2023 witnessed a total of 92 IPOs, including 40 mainboard listings, till mid-November, compared to a total of 90 IPOs in 2022 with 38 mainboard listings.
In 2022, the country’s IPO landscape remained relatively quiet compared to the stellar 2021 due to the global economic slowdown. This was despite the fact that India saw one of its biggest IPOs last year in the form of Life Insurance Corporation of India (LIC). However, it must be noted that India’s IPO landscape was still better compared to other markets.
But the IPO market started buzzing in 2023 and also saw some stellar public listings like those of Mankind Pharma, Tata Technologies, and JSW Infrastructure.
As per EY India’s Q3 IPO Trends report, India was leading globally in the number of IPOs in 2023. The third quarter of the year alone saw 21 public listings, a significant rise from just four in the same quarter last year.
Among the new-age tech startups, ideaForge’s IPO stood out as the drone startup listed at a substantial 94% premium to its issue price. Although subdued, the IPOs of Mamaearth and Yatra were also quite noteworthy.
As 2023 concludes, let’s have a look at the five new-age tech startups that successfully bucked the decelerating IPO trend in the Indian startup space, setting examples for others to embark on their IPO journeys.
ideaForge
After a lull of six months, drone maker ideaForge became the first new-age tech startup to go public in 2023 in the month of July.
Its IPO comprised an offer for sale (OFS) component of 48.7 Lakh shares and a fresh issue of shares worth INR 240 Cr. It was priced in the range of INR 638-672 per share.
The public issue saw an overwhelming response and was oversubscribed within a few hours of its opening. Retail investors led the show, followed by non-institutional investors (NIIs) on the first day of the IPO. While the retail category was subscribed almost 12.5X, the portion reserved for the NIIs was subscribed 5.13X.
By the last day, the IPO was subscribed 106 times. It attracted significant interest from qualified institutional buyers (QIBs), who placed bids for 31.81 Cr shares against the 25.28 lakh shares on offer. Overall, the portion reserved for QIBs was subscribed 125X.
Finally, the shares of the company listed on the bourses on July 7. The stock listed at INR 1,300 per share on the NSE, a premium of 93.5% to the issue price. On the BSE, the stock opened at INR 1,305.10 per share, a premium of over 94%.
Established in 2007 by IIT Bombay alumni Ashish Bhat, Ankit Mehta, Rahul Singh, Vipul Joshi, and Amardeep Singh, ideaForge had a 50% market share in the unmanned aircraft systems space at the end of the financial year 2021-22 (FY22).
The company’s net profit tanked over 77% year-on-year (YoY) to INR 89.2 Lakh in Q2 FY24 as revenue from operations declined 41% to INR 23.7 Cr.
Shares of ideaForge ended 0.36% higher at INR 791.20 on the BSE on December 5.
Mamaearth
Honasa Consumer, the parent of D2C unicorn Mamaearth, was the last new-age tech startup to go public in 2023.
Mamaearth had set the IPO price band at INR 308-INR 324. The startup’s IPO comprised a fresh issue of equity shares aggregating up to INR 365 Cr and an offer for sale (OFS) component of 4.12 Cr shares.
A day before the opening of its public issue, Mamaearth raised a total of INR 765.2 Cr from anchor investors.
On the first day of the IPO, Mamaearth IPO’s employee portion was oversubscribed within a few hours. Of the 34,013 shares reserved for employees, bids were placed for 67,344 shares, translating to a 1.98X subscription.
Meanwhile, retail investors bid for 17.82 Lakh shares against the 52.24 Lakh shares available. Qualified institutional buyers (QIBs) followed suit, lapping up 15.43 Lakh shares against 1.55 Cr shares on offer.
Overall, the issue was subscribed a mere 0.13X at the end of Day 1. It received bids for 36.25 Lakh shares as against 2.88 Cr shares on offer.
The issue picked up pace on Day 2 of the IPO, November 1, receiving bids for 2.01 Cr shares as against 2.88 Cr shares on offer.
On November 2, the last day of the IPO, the issue was oversubscribed 7.61X on the back of a huge demand from QIBs, who bid for 22 Cr shares as against 2.89 Cr shares on offer, accounting for 82% of the total bids.
On November 7, shares of Honasa made a muted debut on the bourses. While the stock listed at INR 330 on the NSE at a premium of 2% from the issue price, it made a flat debut on the BSE at INR 324.
Founded in 2016 by the husband-wife team of Ghazal and Varun Alagh, Honasa counts brands like The Derma Co., Ayuga, Aqualogica, and Dr. Sheth’s in its artillery, besides Mamaearth.
Mamaearth posted a profit after tax (PAT) of INR 29.4 Cr in Q2, registering almost a 94% jump year-on-year (YoY), while its operating revenue also increased 21% to INR 496.1 Cr.
Shares of Honasa ended the trading session on December 5 at INR 363.85 on the BSE, 5.12% lower from the previous close.
Yatra
Online travel aggregator Yatra’s IPO comprised a fresh issue aggregating up to INR 602 Cr and an OFS element of 1.21 Cr equity shares. The price band for the IPO was set at INR 135-INR 142.
A day ahead of the opening of its IPO on September 14, Yatra Online announced that it raised INR 348.75 Cr from 33 anchor investors at INR 142 per share. The company, whose issue opened on September 15, had allocated 2.45 Cr shares to anchor investors.
On the first day of the IPO, the traveltech startup’s issue was subscribed 11%.
However, it picked up pace on the subsequent days and the company’s issue was subscribed 1.61X on the last day, receiving bids for 4.99 Cr shares as against a total of 3.09 Cr shares on offer.
The retail portion received around 1.2 Cr bids against 56.77 Lakh on offer. The QIBs bid for 3.44 Cr shares as against 1.67 Cr shares allocated for the category. The NII category remained the weakest, receiving bids for 35.41 Lakh shares as against 85.16 Lakh reserved shares.
The company, which is also listed on Nasdaq, made a muted debut on the bourses on September 28. The stock was listed at INR 127.50 on the NSE at a discount of 10.2% to the issue price of INR 142 per share, while it was listed at INR 130 on the BSE at a discount of 8.5%.
Founded in August 2006 by Dhruv Shringi, Manish Amin and Sabina Chopra, Yatra is among the largest online travel companies in India, rivalling players such as MakeMyTrip and EaseMyTrip. Yatra also claims to cater to more than 700 corporate customers and offers hotel bookings, holiday packages and homestays. The online travel aggregator claims to list more than 1.03 Lakh hotels in India and more than 15 Lakh globally.
After a profitable first quarter in FY24, Yatra slipped into the red in Q2. Its net loss surged nearly 11X YoY to INR 17.1 Cr in the second quarter, while revenue from operations rose 14% to INR 94.1 Cr.
Shares of Yatra ended the trading session on December 5 at INR 132.65 on the BSE, up 0.23% from the previous close.
Yudiz Solutions
Blockchain and IT development startup Yudiz Solutions was the second new-age startup to go public in 2023. Its shares listed on the NSE’s SME platform.
Its IPO comprised a fresh issue of 27.17 Lakh shares. The price band for the issue was set at INR 162-INR 165.
The issue was subscribed 0.8X on Day 1, receiving bids for 15.92 Lakh shares as against 19.57 Lakh shares on offer.
However, it was oversubscribed 4.75X by the end of the last day of the issue, receiving bids for 92.91 Lakh shares by the end of Day 3 as against 19.57 Lakh shares on offer. While the portion reserved for retail investors was subscribed 6.4X, the NII portion was oversubscribed 3.8X.
The company’s shares listed at over a 12% premium at INR 185 apiece on the NSE’s SME platform on August 17.
Founded in 2011, Ahmedabad-based Yudiz is a global IT services provider and consultant, which offers solutions in domains such as web and mobile app development, AR/VR, AI/ML, IoT, and blockchain.
Yudiz reported a net profit of INR 1.33 Cr in the first half of FY24 as against a net loss of INR 54 Lakh in the year-ago period. Revenue from operations jumped more than 45% to INR 15.87 Cr in H1 FY24 from INR 10.91 Cr in H1 FY23.
Shares of Yudiz Solutions ended the trading session on December 5 at INR 137.20 on the NSE’s SME platform, up 1.78% from the previous close.
Zaggle
The Raj P Narayanam-led fintech SaaS startup Zaggle took its own sweet time, 11 years to be precise, to get listed on the Indian bourses. Zaggle’s IPO comprised a fresh issue of shares worth INR 392 Cr and an OFS element of 10.5 Mn shares.
A day before floating its public issue, Zaggle secured INR 253.52 Cr from 23 anchor investors at INR 164 per share.
On the first day of its public issue on September 14, 2023, retail investors placed bids for 31.13 Lakh shares as against 35.37 Lakh shares on offer. Despite this, the day saw a muted response, receiving 37.01 Lakh bids against 1.93 Cr shares on offer.
However, the issue got oversubscribed 12.57X on the last day. It received bids for 24.29 Cr shares as against 1.93 Cr shares on offer, led by QIBs. The portion reserved for QIBs was subscribed 16.73X with 17.45 Cr bids against 1.04 Cr shares reserved for the category.
Founded in 2011 by Narayanam, Zaggle is a spend management and corporate employee benefits platform. It helps businesses automate their accounts and issues prepaid cards, in partnership with banking partners, to reward their employees with incentives and gifts.
The company reported a net profit of INR 7.5 Cr in Q2 FY24 as against a net profit of INR 2.05 Cr in the preceding June quarter. Revenue from operations surged 55% quarter-on-quarter to INR 184.2 Cr.
Shares of Zaggle ended the trading session on December 5 at INR 241.35 on the BSE, 2.50% lower from its previous close.
