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Following the announcement of the results of the 2024 Lok Sabha elections, startups in the emerging economy sector that are set for their debut on the public market, are now consulting experts for guidance amid the fluctuations in the stock market.
According to a report in The Economic Times, these companies are seeking advice on the optimal timing for their IPOs as they remain optimistic about India’s robust macroeconomic outlook, as indicated by the IPO-bound founders, investors, and investment bankers.
India’s startup sector is also expecting a rise in substantial transactions, a trend that has been gaining momentum in recent months as numerous $100-million deals move closer to completion, the news report said.
The report quoted a chief executive of such an IPO-bound company as saying, “Our bankers will take a call on the timing of the IPO depending on what is best for the selling shareholders and incoming investors... but that will happen after the Sebi approval comes in. Market swings are temporary... what is more important is stability in policymaking.”
Another founder of an IPO-bound company said the Securities and Exchange Board of India (Sebi) is scrutinising all companies carefully, the company will proceed with the listing once it receives approval from the Sebi.
IPO-bound companies
Among the companies preparing for an IPO are the omnichannel retailer FirstCry, food and grocery delivery platform Swiggy, electric vehicle manufacturer Ola Electric, and the ecommerce software company Unicommerce. These companies have filed draft papers with the market regulator for their public offerings. Additionally, omnichannel jewellery retailer Bluestone is gearing up to file its draft IPO papers later this year.
Funding deals in 2024
After experiencing a slowdown in startup investments lasting over a year, several significant funding deals have closed in 2024. These transactions, amounting to $100 million or more, involve companies such as beauty retailer Purplle, health supplements startup HealthKart, and ride-hailing platform Rapido.
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Eyewear retailer Lenskart recently closed a $200 million secondary funding round earlier this month, led by Temasek and Fidelity, valuing the company at $5 billion.
One of the people cited above said the opportunity to invest in late-stage firms is limited. “So, there are more investors chasing certain assets. That creates opportunities for companies looking to close funding as well as give some exit to early investors through secondary investments,” this person said.
Budget to clarify govt agenda
Founders and investors also added that the upcoming Union Budget will serve as a significant milestone in understanding the new government's economic agenda.
The report quoted a Gurgaon-based early-stage investor as saying, “It’ll be a wait and watch on some of the issues where the government has taken a hard stance... such as taxation. There will be more signals in the Budget next month but broadly on some of the major issues impacting startups and investments, it seems there will be policy stability.”
