Will 2023's Renewed Interest In IPOs Continue In 2024? Gurugram-based fintech Mobikwik to raise INR 880 Cr Via IPO
By S Shanthi
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The board of digital payments and fintech unicorn Mobikwik has passed a resolution to raise INR 880 crore through an initial public offering (IPO). The Gurugram-based unicorn will look to list on the bourses for a second time. The company will also consider a pre-IPO placement of shares worth INR 176 crore, according to the special resolution for the IPO, passed recently.
Further, the issue will be through a fresh issuance of equity shares only and the IPO will not include an offer for sale (OFS) by existing shareholders.
Founded in 2009 by Bipin Preet Singh and Upasana Taku, the fintech unicorn offers digital payment solutions, including mobile wallet and buy-now-pay-later (BNPL) product.
This is the company's second attempt towards an IPO. It had earlier filed its draft red herring prospectus (DRHP) in 2021. But, according to media reports, after Paytm went public and saw a 25% dip on its debut and the economy witnessed a slowdown, Mobikwik put its IPO plans on hold, citing market conditions.
Overall, the IPO market seems to be in a better place today. Here is a look at the IPO market in 2023 and what experts predict for 2024.
The IPO Fever: 2023 performance and 2024 prediction
Even though 2022 saw the massive LIC IPO in 2022, 2023 was a year that saw the interest coming back to the IPO space. According to PRIME Database report, with main board IPOs, 57 Indian corporates raised INR 49,434 crore in 2023, a 17% decrease from the INR 59,302 crore raised by 40 IPOs in 2022. The report also says that IPO mobilization rose by 28% from 2022, excluding the LIC IPO that year.
In 2023, 87 companies submitted offer documents to SEBI for approval as compared to 89 in 2022. But, 40 companies seeking to raise around INR 70,000 crore allowed their approval to lapse in 2023. Three companies seeking to raise INR 3,550 crore withdrew their offer documents. And, SEBI returned the offer documents of six more companies trying to raise INR 10,800 crore.
2024, however, looks much more promising for the IPO market, say experts.
"On regulatory front, SEBI has taken a significant step to enhance the efficiency of IPOs by halving the timeline for listing shares on stock exchanges after the IPO closure. This move aims to provide substantial benefits to both investors and issuers in the capital markets," said Mahavir Lunawat, Managing Director, Pantomath Capital Advisors who is also Chairman of Association of Investment Bankers of India (AIBI).
According to a report unveiled by financial services group Pantomath Financial Services Group, under the revised guidelines, IPOs will now be mandated to list within three working days after the closure of the IPO, in contrast to the previous requirement of six working days.
Further, according to news reports, as many as 28 companies have already received a green signal from SEBI for their IPOs, aimed at raising over INR 30,000 crore. And, 36 other companies have submitted their DRHP with SEBI for approval. These companies plan to raise a cumulative amount of INR 50,000 crore, according to information on PRIME Database.
These companies include:
- Ola Electric: The company filed its DRHP with the market regulator last month. The IPO worth INR 8,300 crore will comprise a fresh issue of INR 5,500 crore and an OFS of 95.2 million shares.
- Swiggy: The foodtech giant has reportedly selected bankers for its public issue.
- Byju's: The edtech unicorn is reportedly preparing for an IPO for Aakash Educational Services, slated for later this year. Byju's acquired Aakash in 2021 for $1 billion. "Since acquisition, Aakash has benefited from multiple synergies with Byju's that have accelerated its growth — clocking a three-fold increase in revenue in the last two years. Aakash's revenue is on track to reach INR 4,000 crore with an EBITDA (earnings before interest taxes, depreciation and amortisation) of INR 900 crore in the fiscal year 2023-24," the company said in a statement.
- PayU: The digital payments startup is expected to raise around INR 5,000 crore this year.
- FirstCry: Brainbees Solutions Limited, the parent company of online e-commerce platform FirstCry filed its DRHP with market regulator. The Company's IPO comprises a fresh issue of equity shares aggregating up to INR 18,160 million and an offer for sale (OFS) of up to 54,391,592 equity shares by selling shareholders.
