Paytm IPO starts another season of market offerings

Paytm apart, 18 mega other offerings of a combined worth of Rs 27500 crore are lined up for November release in a show that will stretch till 20 December, 2021.

RateGain Travel Technologies with an IPO size of Rs 1200 crore, Jana Bank with an IPO of Rs 1100 crore, LatentView IPO of Rs 600 crore, Emcure Pharma IPO of Rs 5000 crore, Adani Wilmar IPO of Rs 4500 crore, Inspira Enterprises IPO of Rs 800 crore, Metro Brands IPO of Rs 250 crore, Healthium MedTech IPO of Rs 1500 crore, VLCC IPO of Rs 800 crore, Sterlite Power IPO of Rs 1250 crore, MedPlus IPO of Rs 1638.72 crore, Vedant Fashions IPO of Rs 2500 crore and Tamilnad Mercantile Bank IPO of Rs 1000 crore are among the 18 which will tap the market along with Paytm in what has already been a record year for share listings. Some others also joining the IPO crowd are Sapphire Foods, Tarsons Products, Go Fashion, Mobiwkik, CMS Info Systems, Star Health, Skanray, AGS Transact, Popular, Chemspec, Keventer.

Paytm IPO -- India's biggest-ever initial public offering which is looking to raise nearly ₹ 18,527 crore, will close on 10 November offering investors a price band in the range of ₹ 2,080 to ₹ 2,150 per equity. As India’s leading digital ecosystem for consumers and merchants, Paytm offers a range of services to the users — payment, commerce, cloud and financial services and is backed by Chinese tycoon Jack Ma's Ant Group, Japan's SoftBank, and Warren Buffett's Berkshire Hathaway, which together own around a third of the company.

The company will set aside 75 per cent of the offer for qualified institutional buyers, 15 per cent for non-institutional investors, and the remaining 10 percent is for retail investors.

Companies are now even restructuring before they hit the market to raise their prospects.

Hotel-booking startup Oyo Hotels and Homes which has filed its draft papers with market regulator SEBI for a ₹8,430 crore IPO, has made strategic changes recently and accelerated its adoption across the line of company’s operations.

For instance, OYO nearly manages its entire interaction with business partners through online modes and technology-based marketing channels like OYO Saathi re-seller model and OYO 360 self-signup model.

As per the DRHP, such factors have contributed towards a rapid expansion in the business network and increased OYO’s storefront supply in a cost-effective and scalable manner. Investments in building deep technology have enabled further automation and improved quality of services to its customers.

“The hot IPO market in India confirms the market timing hypothesis of going public decision of firms. Only time will say whether the historical evidence of correlation with the 'bull' market, in terms of duration, will hold true this time around,” says Jay Shankar, head of economics research, Incred Capital.

There are reasons for optimism for future IPOs, according to Arun Mehta, MD & CEO, SBI Capital Markets pointing to a conducive ambience that bodes well for IPOs. Structural reforms by the Govt of India are stabilized, foreign investment is steady, banks are doing well, SEBI has been very forthcoming and accommodating and the result is that we have seen 27 IPOs from January 2021 onwards. Some of them have not only done well but are listed at premium prices,” he said at a recent FICCI Capital Markets Conference.

According to Ajay Tyagi, Chairman, Securities and Exchange Board of India, the success of IPOs from new age tech companies will attract more funds and help create a new eco-system of entrepreneurs and investors. SEBI is constantly reviewing the regime.

The framework for minimum public shareholding was revised to make it easier for large companies to make an IPO. Focus on review of equity fundraising norms will continue in future and SEBI’s Primary Market Committee is deliberating if SPAC framework should be introduced in India.