Startups IPO: Eight Brands ready to take the public route in FY 2021-22

The year 2020-21 has been an ominous one, many people will agree. But it also brought about a certain change in the air of the startup ecosystem. There has been a boom in investments and consumer interest. In fact, the industry has completely reimagined itself to match up to the demand for technology via the digital medium. This has led to increasing in revenues and, thus, profitability. Further, from funding to expansions and acquisitions startups have seen growth twice that we might have seen a decade ago. The next milestone for these rising stars will be going “public” or more easily understood - IPO.

By May 2021, only two startups have gone public – Nazara Technologies and EaseMyTrip. After that, Zomato and Paytm filed for November-December IPOs. Here is an exhaustive list of 8 startups that will file for public listing in the FY 2021-22.

1. Zomato

Zomato has filed a Draft Red Herring Prospectus with SEBI on April 28, 2021. According to the company, it aims to raise over a billion dollars through a combination of fresh equity issue and the sale of existing shares. At Rs 8,250 crore ($1.1 billion), Zomato’s IPO would be one of India’s biggest this year. It will also surpass IRFC worth $649 million in January.

In its filing, Zomato said it intends to raise Rs 8,250 crore through its public listing. Out of this, it intends to raise Rs 7,500 crore through a fresh issue of equity shares. It will raise the remaining Rs 750 crore through an offer for sale by existing investor Info Edge.

2. Paytm

According to reports, Fintech Decacorn Paytm is aiming to raise $3 Billion (≈INR 22000 crores) in IPO. The report quotes an inside official who states that this could be the biggest in India following the Coal India public listing from 2010. The startup plans to list in India around November, perhaps during Diwali. With this IPO, the company is targeting a valuation of around $25 billion to $30 billion.

An insider also suggested that the company board has passed the filings discussions. If the company aims for Diwali IPO, it could file for listing in June-July. Paytm could raise a mix of new and existing shares to meet regulatory obligations in India. The country’s regulations require that 10% of shares are floated within two years and 25% within five years.

3. Delhivery

While the company didn’t state the latest fundraise as a ‘pre-IPO round’, Sahil Barua, co-founder and chief executive officer, Delhivery, told ET that it was set to go public in the next six to eight months. It is looking to raise primary capital of $400-500 million at a $4Bn valuation. This is the first time the management has provided details of the company’s IPO plan, with specific timelines and the potential size of the issue. Delhivery is unlikely to postpone its initial public offering timeline, Barua told ET.

4. PolicyBazaar

The Policybazaar IPO could value the online insurance startup at over $3.5 billion. It would involve new stocks and secondary shares from existing shareholders. The board hasn’t yet approved any IPO activity, but speculations suggest that it will go for a public listing by March 2022. Reports suggest that deliberations are ongoing and details including size and timing could still change. Neither Policybazaar nor Softbank and other investors have commented on the plans. But when the IPO goes live, the Tiger Global backed startup could rank among the first of India’s mega startups to go public this year.

5. Nykaa

In January, Nykaa was looking at a listing by the end of 2021 or early 2022 at a valuation of $3 billion. Recently Nykaa raised an undisclosed amount which valued the company at $1.8 billion approximately. However, according to a report in Live Mint, the planned valuation witnessed a sharp rise from the company’s last valuation of $ 3 billion (Rs 21,900 crores). Nykaa, however, will keep the size of the public offer listing unchanged, at between $500 million and $700 million.

Nykaa founder Falguni Nayar had said in 2018 that the company would look for an IPO by 2020 or so. However, the pandemic might have slightly altered those plans. The first beauty retailer to go public, Nykaa has designated Kotak Mahindra Capital Co. and Morgan Stanley as managers for its public offering.

6. Pine Labs

The company has already started working towards launching an IPO by March 2022 in the US. In March, a ToI report suggested that the PoS provider has begun early-stage discussions with at least four merchant bankers to work on its IPO. It is aiming at a valuation of around $5 billion. But these are early estimates and the valuation could change based on how these discussions progress.

The company currently values at $3 billion, up from about $2 billion in a December round last year and $1 billion in early 2020.

7. Car Trade

In May, Car Trade passed a special resolution to convert the company from a private limited to a public company and change the name from CarTrade Tech Private Limited to CarTrade Tech Limited. The board of CarTrade has approved the appointment of its founder and CEO as MD of the company for the next five years.

CarTrade has filed a DRHP for an IPO with capital market regulator SEBI to raise around Rs 2,000 crore. The offer comprises 26.96 per cent of post-offer paid-up equity share capital. The face value of equity shares is Rs 10 apiece.

8. MobiKwik

According to an Entracker report, MobiKwik raised $20 Mn from Abu Dhabi Investment Authority. The fresh funding appears to be a part of a pre-IPO round. In its regulatory filings in March, the company had said that the ongoing fundraise was IPO specific for listing expenses and will raise more in this pre-IPO round.

In March 2021, the company had also said that it looks to go public before September 2021 to raise $200-250 million. The deliberations for IPO are under process and the timing of fundraising may change.