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How India’s Tech IPO Boom Turned to Bust

Surging inflation, looming higher interest rates, supply chain bottlenecks and the Ukraine war are among factors that brought the market back to earth.

Paytm denies data leaks
The Paytm app is seen on a smartphone. Photo: Reuters.


India’s IPO market has crashed back to earth this year after a record 2021.

Surging inflation, looming higher interest rates, supply chain bottlenecks and the Ukraine war are among the factors that turned the boom into a bust.

Companies raised $15.4 billion (1.17 trillion rupees) last year, led by tech start-ups including Paytm, food delivery outfit Zomato, online insurance broker PolicyBazaar, and online fashion seller Nykaa. Though many were unprofitable, investors still flocked to buy their shares at sky-high valuations.

Those who held onto them have been pummelled. Thirty-three of the 63 companies that went public last year have slumped below their listing price. The biggest losers were online car trading platform CarTrade, which slumped 59%, and Paytm, down 55%.

“Investors can’t fathom the justification of the premiums that these companies charged at the time of their IPOs,’’ said Arun Kejriwal, director of advisory firm Kejriwal Research & Investment Services in Mumbai.  “They’re abandoning these stocks.”



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Monster Offering

That’s bad news for companies that planned listings this year. These include fintech start-up Mobikwik,  Oyo Hotels and Homes, and Delhi-based logistics services player, Delhivery

With 55 companies approved by the Securities and Exchange Board of India to raise almost $20 billion, and another 50 companies waiting for approval to raise another $12 billion, the pipeline is though still bulging.

A monster $9.21 billion listing by Life Insurance Corporation of India may launch as early as this month and will be the nation’s biggest-ever fundraising.

Many companies are, though, delaying their listing plans and rethinking valuations from the sky-high levels of last year.


  • By Indrajit Basu


ALSO ON AF: Paytm Share Price Down 55% and Analysts Say Worse to Come

This story was updated on April 14 to correct the numbers in the third paragraph.

Indrajit Basu

Indrajit Basu is an India-based correspondent for Asia Financial and wears two hats: journalist and researcher (equity). Before joining AF he reported on business, finance, technology, wealth management, and current affairs for China Daily, SCMP, UPI, India Today Group, Indian Express Group, and many more. He is also an award-winning researcher. If he didn't have to pay bills, he would be a wanderer.


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