This may be read in tandem with an earlier post.
Finance is the life blood of a business and rightly so. It is required at every point in its life cycle, from investing in R&D, procuring materials to sustaining the fight with the competition in the long run. If the business has a good business model and appears to be a good bet, it can raise the required finance from individuals and institutions who invest in such businesses with the hope that it may give them a higher return if the business grows.
Over the past year, many companies tried to improve their value proposition and some even changed their business model. And most of these efforts did succeed. This, coupled with the liquidity infused by the central banks all around the world resulted in more and more money flowing into such ventures. Then there are bonds across some countries especially Europe, that have a negative yield these days. This further pushes those investors who invested in such funds also to the share markets and startups.
Many startups that showed potential but did not have enough funds found monies coming their way in BILLIONS! That’s right with a B.
Billion seems to be the new $100 million at least as far as startups go.
K GANESH . & SRINI RAI, Moneycontrol
Just for the 3 months(from Jan 12), 10 startups have claimed Unicorn status(companies valued more than $1 billion). This was unprecedented.
| Unicorn | Date | Valuation(in $billion) | Sector |
| Digit | 15-Jan | 1.9 Billion | Insurance |
| Innovaccer | 24-Feb | 1.3 Billion | Software |
| Infra.Market | 25-Feb | 1 Billion | Infrastructure |
| Five Star | 27-Mar | 1.4 Billion | Banking |
| Meesho | 5-Apr | 2.1 Billion | Social Commerce |
| Cred | 6-Apr | 2.2 Billion | Fintech |
| Pharmeasy | 7-Apr | 1.5 Billion | E-Pharmacy |
| Groww | 7-Apr | 1 Billion | Stockbroking |
| ShareChat | 8-Apr | 2.1 Billion | Social Media |
| Gupshup | 8-Apr | 1.4 Billion | Enterprise Messaging |
Then there are those companies at the end of their startup cycle and ready to come out of their cocoons. In the US, Companies like AirBnB and Doordash started the so called IPO “POP” trend. Their shares rallied over 100% the first day of trading. This along with ease of coming to markets with by merging with SPACs gave confidence to other tech startups around the world.
Here in India, though there were no SPACs allowed by law, companies did not shy away from raising public capital. The following are some of the major IPOs in 2021 till April: –
| Issuer Company | Issue Open | Issue Close | Issue Type | Issue Size (Crore Rs.) | Issue Price (Rs.) | Listing Day Gain/Loss |
|---|---|---|---|---|---|---|
| Indian Railway Finance Corporation Limited IPO | Jan 18, 2021 | Jan 20, 2021 | BB | 4,633.38 | 26.00 | -4.42% |
| Indigo Paints Limited IPO | Jan 20, 2021 | Jan 22, 2021 | BB | 1,176.00 | 1,490.00 | 109.31% |
| Home First Finance Company India Ltd. IPO | Jan 21, 2021 | Jan 25, 2021 | BB | 1,153.72 | 518.00 | 1.81% |
| Stove Kraft Limited IPO | Jan 25, 2021 | Jan 28, 2021 | BB | 412.63 | 385.00 | 15.83% |
| Nureca Limited IPO | Feb 15, 2021 | Feb 17, 2021 | BB | 100.00 | 400.00 | 66.66% |
| RailTel Corporation of India Limited IPO | Feb 16, 2021 | Feb 18, 2021 | BB | 819.24 | 94.00 | 29.15% |
| Heranba Industries Limited IPO | Feb 23, 2021 | Feb 25, 2021 | BB | 625.24 | 627.00 | 29.55% |
| MTAR Technologies Limited IPO | Mar 3, 2021 | Mar 5, 2021 | BB | 596.41 | 575.00 | 88.22% |
| Easy Trip Planners Limited IPO | Mar 8, 2021 | Mar 10, 2021 | BB | 510.00 | 187.00 | 11.39% |
| Anupam Rasayan India Limited IPO | Mar 12, 2021 | Mar 16, 2021 | BB | 760.00 | 555.00 | -5.24% |
| Craftsman Automation Limited IPO | Mar 15, 2021 | Mar 17, 2021 | BB | 823.70 | 1,490.00 | -3.83% |
| Laxmi Organic Industries Limited IPO | Mar 15, 2021 | Mar 17, 2021 | BB | 600.00 | 130.00 | 26.62% |
| Kalyan Jewellers India Limited IPO | Mar 16, 2021 | Mar 18, 2021 | BB | 1,175.00 | 87.00 | -13.45% |
| Nazara Technologies Limited IPO | Mar 17, 2021 | Mar 19, 2021 | BB | 582.91 | 1,101.00 | 43.22% |
| Suryoday Small Finance Bank Ltd IPO | Mar 17, 2021 | Mar 19, 2021 | BB | 582.34 | 305.00 | -9.44% |
| Barbeque Nation Hospitality Limited IPO | Mar 24, 2021 | Mar 26, 2021 | BB | 452.87 | 500.00 | 18.08% |
| Macrotech Developers Limited IPO | Apr 7, 2021 | Apr 9, 2021 | BB | 2,500.0 |
This makes this year’s successful IPO tally to 17, 2 greater than the whole of last year which was 15, together they raised a total of about Rs.17,500 crores!
All in all, for the markets and the business environment as a whole, 2021 seems to be the best year of all time. But with the looming fears of the effects of the second wave of the virus, it is still to be seen how the growth fares for the rest of the year and beyond.
