The Echo-nomist

2021 is about to come to an end. This year came with its own set of surprises (as if 2020 wasn’t enough). Just when the world was starting to go back to normal, the Delta variant created chaos in the world. But none of that stopped the stock market. Many companies went public during the past few years. India, especially, experienced an IPO boom. SEBI had its hands full with 63 companies going public and ₹1,18,707 crore being raise solely through IPOs (source: Mint). And more companies are expected to hit the markets in 2022. Fun fact, the money raised in the Indian primary market in 2021, is 62% more than the total amount raised in the preceding three years (2018-20).

Loss-making startups going public, high participation by retail investors, huge listing gains. These were uncommon before 2021 in India. This is post-covid economy where high liquidity in money markets has allowed these young startups to list on stock exchanges, aided by a supportive regulator.

Let’s take a look at the IPOs that we have covered in the past year…

Nykaa

Nykaa took the e-commerce and beauty market by storm when it started business operations. When it debuted on the National Stock Exchange, they took the investors by storm as well. It’s probably India’s most glamorous IPO till date. They closed with a 96% gain on debut day, because of which their founder, Falguni Nayar, became India’s richest self-made woman. She started Nykaa with nothing but a dream and her savings. Now, it’s a unicorn and a market leader in the Beauty and Personal Care (BPC) and is working on enhancing its market share in the larger Fashion segment.

Their share is currently trading at ₹2,098, which is 86% up as compared to its issue price of ₹1125. Its share price is showing a declining trend. Wait and watch what happens next…

Here are the stories we shared about Nykaa:
–The stage is set for Nykaa’s debut on the markets
–An unforgettable Diwali for Nykaa

CarTrade

The second-hand car market is an emerging industry, which was given a boost by the pandemic. It’s an affordable choice for the customer, especially with sky-high prices due to the global chip shortage. They became the first company in this industry in India to become profitable and go public.

Their restated profits for the 9 months period ended December 31, 2020 were 172% more than their restated profits for the entire FY20. There has been an upward trend in their profits over the past four years, showing a positive outlook. However, their share is currently trading at ₹867.65. That’s nearly 50% lower than their issue price (₹1,618)! The share was giving returns for the first few months after listing. But of late, their share price has been on a steady decline.

These are the stories we shared:
–Big money for those used cars
–CarTrade’s race to Dalal Street

Zomato

This was one of the most anticipated IPOs of 2021 in India. It’s the biggest food delivery app in India with huge sales volume. Zomato’s IPO was talked about a lot since they haven’t had a profitable year in its 12 years of history! SEBI made its rules for loss-making companies going public long back. Back then, it was considered tough to value a loss-making business and they wanted to protect the retail investors. However, times change and so does the market environment. Zomato’s IPO help reduce hesitation in investors’ mind about trading the shares of loss-making firms.

Their issue price was ₹76 per share and the issue was oversubscribed 38.25 times. On debut, they served listing day gains of 65.5%. Their shares are currently trading at ₹135, which is nearly twice the issue price. The lesson learnt: non-profitable startups do just as well.

Here’s the story we shared:
–Capital gains home delivered by Zomato

Besides these, there were several other debutants on the Indian stock markets this year. We wrote a story covering some of the others (Latent View, Sapphire Foods, Delhivery, PB Fintech and Paytm)- IPO Boom in Indian Markets

While it was a record year for Indian markets, other exchanges weren’t far behind. Many companies debuted on NYSE, NASDAQ, LSE etc.

Deliveroo

Deliveroo’s $2.1 billion IPO was supposed to bring some relief to LSE, which had been performing not-so-well since Brexit. However, when the company hit the stock market, it plummeted. It fell as much as 31% in the first few minutes. Eventually, their shares closed 26% down. There was a period in August when their share price was equal to the listing price before it fell again. It’s currently trading £214.5 which is approximately 45% lower than the listing price.

Here’s the story we shared:
–Deliveroo’s IPO wasn’t its April Fool’s joke

Robinhood

Robinhood is a platform for commission-free trading of stocks, crypto and more. It gained popularity at the start of the pandemic, especially among the youth. They pulled it off by making their app fun with “most popular” lists and digital confetti. They notched up a whopping valuation of $11 billion.

They faced some backlash for the ‘gamification’ of investment and advertising to inexperienced investors. It was also because they played a roll in enabling “meme stocks” such as GameStop and AMC Entertainment. Robinhood managed to push retail investors in the US, which is something they deserve credit for.

Their stock is down about 50% from its IPO price and 77% from its $85 high! It has been disappointing for the traders.

Here’s the story we shared:
–Robin rides the Batmobile of Nasdaq

Coinbase

Coinbase entered the market in mid-April via direct listing. It’s an app that let’s you buy, sell and exchange crypto. Its aim is to make buying and selling of cryptocurrency easier by providing a platform for the buyers and sellers to connect. They became the first Bitcoin trading platform to be publicly traded. After opening at $381 on Nasdaq, it shot up to $429.54 within a few minutes. It even traded 52% up the reference price. They closed at $328.28, posting a first day gain of 31%. Thus making it the 7th biggest listing in the US of all time. However, their shares are currently trading around $225, below their original reference price.

Here’s the story we shared:
–Coinbase’s roller coaster ride

After the year that was, 2022 has big expectations. Will the companies be able to surpass this year’s gains?