We all get excited about new things - one of them being the IPOs for investors. When you are an investor, you know exactly how this feels. The feeling of, "Wow! There is a brand new company out there you can be part owner of." Well, the new year is coming, and so are several other things - like new IPO listings that you just can't miss. So, let's get started to get to know them. Before that - let's look at the basics first.
What is the Meaning of an IPO or an Initial Public Offering?
The term "IPO" refers to an initial public offering. In an IPO, a privately owned firm puts its shares on a stock exchange, open for purchase by the general public.
Many people think of IPOs as massive money-making opportunities - when high-profile companies go public, their share prices skyrocket. While IPOs are clearly hot, you should be aware that they are extremely hazardous investments with uneven long-term returns.
Going public is a complex, time-consuming process that most businesses find difficult to navigate on their own. A private firm seeking an IPO must not only prepare for an increase in public scrutiny, but also file a slew of paperwork and financial disclosures to satisfy SEBI, which governs public companies.
That's why a private firm planning to go public engages an underwriter, usually an investment bank, to advise on the IPO and assist in determining the initial selling price. Underwriters assist management in preparing for an IPO by drafting important documents for investors and scheduling roadshow meetings with potential investors.
The underwriter assembles a syndicate of investment banking firms to assure extensive distribution of the new IPO shares.
Once the firm and its advisors have agreed on an IPO price, the underwriter distributes shares to investors, and the company's stock begins to trade on a public stock market, such as the National Stock Exchange or the Bombay Stock Exchange.
So, before you can download an investment app in India and get to choose companies - know the new ones that are about to hit the floor.
List of the Biggest IPOs in 2023
Here are some of the market giants coming to play, and soon you will see investment windows open through them:
a) OYO
After nearly a decade since its inception in 2013, Oyo, a key player in the hospitality sector, was scheduled to go public this year. However, according to an ET story last month, the corporation has postponed it until next year. According to those acquainted with the subject, this is due to a market downturn that would harm its valuation.
After talking with its bankers and investors, the board of Oyo, originally known as Oravel Stays Ltd., reportedly discussed a modification in the timing of the offering during repeated meetings in May 2022. If the corporation restarts the procedure by this year, the earliest possible IPO date would be in 2023, according to ET. The IPO is projected to be approximately Rs 8,000 crore in size.
b) Mamaearth
Mamaearth is the most recent to declare plans for an IPO. According to a Reuters report yesterday, the Indian cosmetics business and unicorn is planning a $3 billion IPO next year.
According to three sources with direct knowledge of the company's plans, Sequoia Capital-backed Indian skincare startup Mamaearth speaks of raising at least $300 million in an Initial Public Offering next year and is seeking a valuation of approximately $3 billion. The company was previously valued at $1.2 billion in January of this year, when it raised new capital from investors such as Sequoia and Sofina of Belgium.
According to Reuters, a person knowledgeable about the conversations stated that Mamaearth is aiming for a valuation of roughly $3 billion. It intends to file draft regulatory filings by the end of this year, according to people who declined to be identified because the proposal is confidential.
c) Swiggy
Swiggy, the Indian food delivery business, has begun plans to raise at least $800 million in an IPO early next year, the Nikkei Asia reported in February 2022, citing people familiar with the situation.
Swiggy has also been said to have begun adding independent directors to its board, and it intends to present itself as a logistics company rather than merely a food delivery company.
SoftBank Group-sponsored Swiggy had already increased its valuation to $10.7 billion in its $700 million investment round, making it a decacorn in January 2022.
Conclusion
When you see big companies like these come into play and give you an opportunity to grow more (financially), it is a great deal to wait for. So, let's hopefully wait and watch them walk in.