Several Indian firms are brainstorming to release their initial public offerings (IPOs) and are now subjected to excessive investor inspection owing to the calamitic debut of Paytm, a digital payments startup that released India’s most humongous IPO to date.
Indian firms follow Paytm in releasing IPOs
Offerings in the pipeline are inclusive of Oravel Stays Ltd., the operative hand of hotel-booking startup Oyo, which is seeking to accumulate close to USD 1 billion. Other magnanimous listings are inclusive of API Holding Ltd., the parent firm of the online pharmacy portal – PharmEasy, and logistics firm – Delhivery Ltd.
Premeditated smaller IPOs could have to deal with a challenging time in pricing their shares if there is a recession in the investor appetite for new-fangled listings. The stock rates of Paytm’s rival company – One MobiKwik Systems Ltd. have slipped and fallen around 40% in the share market.
Paytm’s shares have slumped around 30% since its listing last week, with a comeback on 23rd November (Wednesday). However, this rebound was not sufficient to balance the losses endured from the previous two sessions. Some Indian firms that were seeking to profit from the pool of transactions in India’s surging IPO market so far in 2021 may now have to reconsider the pricing and the timing of releasing their IPOs, as per Edelweiss Financial Services Ltd.
Evaluation is most probable to emerge as the preliminary sticking point for those Indian firms that seek to enter into the share market. Paytm’s valuation (approximately 26 times the price-to-estimated sales for the fiscal year of 2023) towers beyond the S&P BSE Sensex Index threshold by about 4 times.