Current climate:
The ongoing bull run in equity markets is a global phenomenon. However, what makes it more exciting for India in particular is that it heralds the maturity of the new-age companies.
Zomato paved the way for tech IPOs, while Nykaa, PayTM, PolicyBazaar, etc. are expected to follow suit in 2021.
So-called traditional business models are impacted by tech disruptions as well.
For e.g. - Sona BLW, an auto ancilliary, caught investor fancy due to its EV linkages and has nearly doubled in 3 months from its issue price.
All in all, the next decade or so promises to be a new horion for investors to uncover.
Key Challenges:
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Many new-age companies are not expected to have profitable P&Ls. Even profitable companies coming in for IPOs have addedd complexities which were unheard of earlier (e.g. ESG scoring).
How to value such companies is a question that perplexes even seasoned investment bankers. As time progresses, valuation matrices won’t be dictated by the novelty of companies raising funds. -
The IPO prospectus keeps getting longer! A Financial Times article says "Microsoft, going public in 1986, said all it needed to in 50 pages. A couple of decades later Google weighed in at 230. Didi and Uber both bombarded would-be investors with about 400 pages of information. Paytm, listing in India, this month bested the duo with a 500-page “red herring”
Source: Subscribe to read | Financial Times -
IPOs are generally open only for a short while. In that period, PR firms, financial media, and brokers inundate the average investor with advice (mostly “buy” calls). Every IPO has a story woven around it to make it more appealing. E.g. - A company founded in a garage, massive internet under-penetration in India, the EV future, or the doom of old-age industries.
How this thread could help:
With permission from Dhan admin, I am creating this thread for upcoming IPOs.
This shall serve as a one-stop shop for all upcoming IPOs where investors exchange ideas and opinions and separate data from noise.
Terms:
This thread is to be used only until listing. Subsequently to listing, a separate thread should be created as per forum guidelines.
Broadly, following are some minimum information required to create your posts:
- Company Name
- Information - <corporate history, manufacturing locations, products, sources of revenue, cost drivers, competitors, market share, economic climate, tech climate, etc>
- Governance - <Promoter characteristics, compensation history, board composition, ESG outlook, etc.>
- Financials - <Current and projected numbers, relevant ratios, etc.>
- IPO details - <Capital to be raised (primary and secondary), expected utilization of funds, share price band, valuation, etc.>
- Risks and final investment rationale