Start-up IPO is likely to remain the buzzword in the upcoming years. Relying on venture capital or private equity investments, Indian start-ups have often been held back going public due to regulations. However, recent amendments in law, including nod to allow start-ups to directly list on stock exchanges overseas before listing in India, easier migration to the main board, decreased holding period and special rights, comes as a shot in the arm for Indian start-ups.
Start-up IPO Droom
With the government giving its nod for doing away with the dual listing requirement for Indian start-ups, the company plans to get listed on Nasdaq in 2021 through its Singapore-based holding entity, and could also look at a possible Hong Kong stock exchange listing post the Nasdaq IPO. The company has been focussing on keeping its cash burn low and is confident of hitting profits by financial year 2022.
Flipkart Initial Public Offering
The much-anticipated Flipkart IPO could soon be a reality. US retail player Walmart is reportedly gearing up to float a $10 Billion Flipkart IPO in the US, divesting up to 25% of the stake in the Indian e-commerce player. The massive surge in e-commerce sales is corroborated by Flipkart’s own statistics – the e-commerce giant witnessed a ten-fold increase in its shipments during its festival sale this year.
Recent amendments in law, including nod to allow start-ups to directly list on stock exchanges overseas before listing in India, comes as a shot in the arm for Indian start-ups.
BYJUs Eyes Initial Public Offer
Online education website BYJU’s is currently backed by the likes of Lightspeed and Sequoia and holds a valuation of $10.8 Billion. The lockdown and subsequent closure of schools and education institutions is said to have fueled engagement on the website to increase by 300%. Besides being the most-funded education start-ups in the world, the company acquired WhiteHat Jr, a platform that teaches coding to students, a step expected to help in the acceleration of the company’s international expansion plans.
Big Basket Aims to Go Public by 2023
Big Basket is India’s largest pure play online grocery company. The company has seen sharp uptick in number of orders (3x) and new customers (2x) during the lockdown. The GMV of Big Basket reached $1 Billion in June last year, delivering around 0.4 million orders per day. The Tata Group is also expected to buy the entire shareholding of two of Big-Basket’s biggest investors – Chinese e-commerce behemoth Alibaba and private equity firm Abraaj Group.
Start-up IPO Oyo
The company has been preparing for an IPO since past year. Despite being hit by pandemic, the company claims to have $1 Billion in funds to be used to survive and prepare to offer an IPO, focussing profitable locations and core business.
Larger companies, such as unicorns, are interested in expanding their funnel for sources of large amounts of capital they need for their journey. By accessing the public markets, they are looking to open up another pool of capital. This is also crucial in light of the recent norms restricting investments from Chinese players.
Besides, Covid-19 has helped establish start-up’s business models, especially of e-commerce companies. It has led them to see better demand on their platforms. Hence, IPO is the next available strategy.