“Price is what you pay. Value is what you get.” – Warren Buffet
The share market has become an area of interest for the millennials recently and has drawn out quite a bit of attention from the younger generation. With an increasing number of companies going public, we set out to identify the top 13 in our books, those that have got us looking forward to it. But before we hand out the names, let’s quickly touch upon what an IPO is, and when a company can go public (of course, you can also just scroll past the b.s. and jump straight to the names as well).
Know The Basics
The process of a private company offering shares to the public in a stock issuance is known as IPO (Initial Public Offering). Before an IPO, a company remains private. As such, it can grow rapidly but with only enough capital for its small number of shareholders and employees.
Once a private company reaches a threshold in the growth process, where it believes it is mature for the rigors of SEC regulations with all its benefits and responsibilities to public shareholders, they register its IPO with SEBI (Securities and Exchange Board of India). They are done through an Initial Public Offering Draft Prospectus (DRHP) as well as an IPO Red Herring Prospectus (RHP) or Final prospectus which makes them one of many new IPOs on the market today.
When Can a Company Go Public In India?
In India, a company can go public (offer IPOs), once they meet the following criterion:
- The company must have a net worth (assets – liabilities) of at least 1crore for each of the last 3 years.
- The company must have tangible assets of at least Rs. 3 crore in each of the 3 preceding years. Out of these assets, a maximum of 50% must be held in monetary assets.
- The average operating profit for each of the last three years must be at least Rs. 15 crore.
- If the company has changed its name in the last year it must have earned at least 50% of the revenue for the preceding full year from the activity indicated by the new name.
- The existing paid-up share capital of the company must be fully paid or forfeited. This means that the company looking for an IPO should not have partly paid-up shares as a part of its equity.
There is something so tantalizing about a company going public, it’s like they’re putting on their best face for the world to see. Buy those right new stocks at discounted prices and you could wind up making your dreams come true. Investing in IPOs means a chance for quick, easy profit-making with only some risk involved – and there are quite often exceptional opportunities where it pays off tremendously well!
The public sector has been able to successfully raise over ₹ 25,000 crores, despite the pandemic decimating the third and fourth quarters of FY 2020. This robust increase in funds proves that people are still confident about India’s future even with a major health crisis looming.
The SEBI has been flooded with requests for IPOs. In the past few months alone over 80 companies have walked through their doors to acquire certifications needed to come out with an IPO next year. For investors, this means more opportunities than ever before. The IPO market is expected to see a variety of major big releases thanks to the strong momentum that’s guiding Sensex and Nifty into record highs in 2021. The IPO hype for FY 2021 is already in full swing, with a long list of companies lining up to go public. Let’s have a look at the top 13 IPOs that are getting investors excited and optimistic in 2021.
One97 Communications Limited (Paytm)
Paytm is the leader of India’s mobile payments market with a whopping 200 million active users and 16 million merchants. It has even acquired an IP while waiting for its IPO, which doesn’t make it sound like they’re exactly in too big of a hurry to get its money out.
Bajaj Energy Limited
Bajaj Energy is one of the largest private-sector thermal generation companies in Uttar Pradesh. In a partnership with Lalitpur Power Generation Company Limited, (LPGCL), with a total gross installed capacity of 2,430 MW and an 850 MW management contract from LPGCL’s 1st plant for 25 years until 2040 where they will be delivering 450 GW to India’s grid on behalf of BEL; it seems that this agreement certainly has the potential to grow into something big!
Policybazaar Insurance Brokers Private Limited
Policybazaar, also backed by industry giant SoftBank, the online insurance company is said to be eying a 2021 IPO at a valuation of 3.5 billion dollars, or $3.5B for short! The company is also aiming to attain upwards of 250 million dollars (or $250M) at a company valuation of 2 billion dollars before its IPO – which has been set in September 2020 and will take place that same month with an estimated total value from analysts’ estimates between 20-30 Billion Dollars ($20-$30B).
SBI Mutual Funds
The State Bank of India (SBI) Mutual fund is reportedly preparing for an IPO this year. The country’s largest lender will kick off the IPO process of its mutual fund joint venture in the next few months after asking investment banks for proposals and holding discussions with its board and shareholder Amundi Asset Management. SBI Mutual Fund, whose current value is around $7 billion, could raise about $1 billion from the public offering. The fund’s listing would join UTI Asset Management Co. and HDFC Asset Management Co. to be listed in the Indian market. This would be the third such listing in the country. The first-time share sale at $1 billion could be India’s biggest since the $1.4 billion listings by SBI Cards & Payment Services Ltd. in March 2020.
Adani Wilmar Limited
The port-to-power conglomerate, Adani Group is preparing to raise nearly $1 billion in 2021 through an initial public offering (IPO) by their subsidiary company, Adani Wilmar, which is aiming to be India’s largest food producer by 2027. The $1 billion to be raised through IPO will give them more leverage and power as well as unlock value for investors.
Zomato is a Food Services company in India that sells food worth more than $1B. As of December 31, 2020, the app has 350,174 restaurants listed and 41.5 million monthly average users. According to App Annie’s estimates, it includes 350000+ listings for restaurants across 526 cities. The most popular application among those who enjoy eating out. Zomato also has 23 countries outside India, being serviced by them. Zomato Limited is planning to raise around ₹8250 crores via IPO.
Flipkart India Private Limited
A couple of years after the news of Walmart acquiring a stake in Indian online retail website Flipkart hit the market, the retail industry giant is all set to unload its recent acquisition onto the IPO markets. With a valuation of about 25 billion dollars as per its last round of funding, the company would be the first-ever Indian original country to be traded on the US exchange.
Delhivery Private Limited
Delhivery is India’s leading e-logistics service provider, with over 20% market share in their sector and a cumulative 780 million raised through financing rounds. With backing from industry giants like Softbank, they are hoping to go public by 2021.
Go Airlines (INDIA) Limited
GoAir, backed by the Wadia Group, is betting big on its ultra-low-cost business model to tide over the impact of the COVID-19 pandemic. The airline will be rebranded as ‘Go First’ and it plans to operate narrow-body aircraft types across its fleet which comprises Airbus A320 (A319) & A321 jets in operation currently with a market share exceeding 9.5% in India.
With its headquarters in Bengaluru, BYJU is a pioneer of online education. For the past few years, it has been backed by some of India’s leading investors like Lightspeed and Sequoia making their total valuation at 10.8 billion dollars with an estimated 300% increase in engagement after schools started to close down due to financial woes. While they are still waiting for the date on when they will go IPO, there have already been rumors about how Ambani plans on entering this space but that does not mean BYJUs should take anything lightly as competition intensifies every day!
Ola, an Indian cab aggregator that is similar to Zomato with a 55% market share and growing revenue of 39%, has been backed by global giants like Tiger Global alongside Tencent. They are looking towards their company IPO in 2021 at over 3 billion dollars raised so far.
Nykaa E- Retail Private Limited (Nykaa)
Nykaa, the top Indian women’s online marketplace with around 15 million registered users and 1.5 million orders a month, which is set to go public later this fiscal at a valuation of $4.5 billion has been able to carve out its niche by providing an excessive focus on beauty products for their customers who are looking for something different than Flipkart or Amazon in that specific category. The company plans to raise between 500-700 Million dollars through an IPO as they prepare themselves financially before going into what will be exciting new territory.
LIC – Life Insurance Corporation Of India
The LIC is set to be the biggest IPO to be ever listed on Indian stock markets and will help The Indian Finance Ministry raise funds for India, as hinted by Ms. Nirmala Sitharaman. They are looking to sell off a 10% stake through an IPO in 2021 and raise funds for government projects worth ₹ 80,000 crores.
Nowadays, it has become simpler to register for an initial public offering because of the online registration process. In India, most national banks and popular stock brokers provide facilities for online IPO applications. An investor must open a Demat account or a trading account with the brokerage institution that provides IPO service to apply online.
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- The list of prospective IPOs listed above is subject to significant modification because the information has not yet been updated on any exchanges.