Dedicated IPO discussion thread - Current climate, challenges, and its need

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:

  1. 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.

  2. 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

  3. 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.

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