LOSING SHEEN

Volatile markets and cautious investors force tech startups to rethink their IPO plans

- NACHIKET KELKAR

Indian equity markets had a dream ride in 2021, with 63 companies going public and raising ₹1.19 lakh crore. Among them, One 97 Communications, the parent company of the fintech major Paytm, made the biggest buzz, raising ₹18,300 crore in November 2021 and overtaking state-run miner Coal India’s ₹15,199 crore IPO in 2010 as India’s biggest.

Eight other tech startups also went public last year—beauty products e-tailer Nykaa (FSN Ecommerce), food aggregator Zomato, gaming company Nazara Technologies, travel technology company RateGain, travel platform EaseMyTrip, insurance aggregator PolicyBazaar (PB Fintech), online automotive portal CarTrade Tech and MapMyIndia (CE Infosystems). Amid an equity market euphoria fuelled by easy money policies of global central banks in the wake of the pandemic, investors lapped up the shares of these newage companies. The issue of Nazara Tech, for instance, was subscribed as much as 175 times, EaseMyTrip 159 times and Nykaa 82 times.

Some of them went on to touch new highs post listing. Nazara Tech share was worth ₹3,354.40 on October 11, 2021, a three-fold gain over its issue price. Nykaa and Zomato more than doubled.

The fortunes, however, seem to have reversed in 2022. Paytm, which had set an issue price of ₹2,150, closed at ₹661.85 on April 18—a 69 per cent slump in five months. CarTrade Tech was down 61 per cent since listing, PB Fintech was down 21 per cent and RateGain had fallen 10 per cent from its issue price.