Indian startups soar in 2024 with 13 IPOs raising nearly Rs 30,000 Cr

The year 2024 has set a benchmark for tech companies or startups in India, with 13 companies launching their initial public offerings (IPOs). This marks a significant rise compared to previous years, where the numbers stood at 6 in 2023, 6 in 2022, and 10 in 2021. With around 50 startups announcing plans to go public in the near future, the momentum is expected to continue in 2025.

Key Highlights of 2024 IPOs

The 13 IPOs in 2024 span diverse sectors, including fintech, SaaS, logistics, proptech, EVs, e-commerce, foodtech, and traveltech. Collectively, these companies raised Rs 29,247.4 crore in funds including Rs 14,672.9 crore ($1.75 billion) via fresh issue of shares and Rs 14574.5 crore ($1.73 billion) via offer for sale (OFS).

• The largest IPOs were Swiggy (Rs 11,327.43 crore), Ola Electric (Rs 6,145.56 crore), FirstCry (Rs 4,193.73 crore), Digit Insurance (Rs 2,614.65 crore), and TBO Tek (Rs 1,550.81 crore).

• On the SME front, Trust Fintech, TAC Security, and Menhood raised Rs 63.45 crore, Rs 29.99 crore, and Rs 19.46 crore, respectively.

Fresh Issues vs Offer for Sale (OFS)

Most IPOs included a mix of fresh issue components and offers for sale (OFS):

• MobiKwik raised the entire capital via fresh issue while Ola Electric, BlackBuck, and Digit Insurance followed the list, reflecting their need for growth capital.

• Unicommerce, Ixigo, Awfis, TBO Tek, Swiggy, and FirstCry had a heavy OFS component, showcasing shareholder exits.

IPO Subscription

• Among main board IPOs, Unicommerce saw a huge demand among investors with 168.39 times subscription followed by MobiKwik (119.38 times), Awfis (108.56 times), Ixigo (98.34 times), and TBO Tek (86.7 times).

• In contrast, BlackBuck (1.86 times) and Swiggy (3.59 times) saw moderate investor interest despite their large IPO sizes.

• TAC Security’s IPO was subscribed 280.68 times, while Menhood and Trust Fintech saw 157.59X and 72.26X subscriptions, respectively, underscoring the strong appetite for SME stocks.

Listing Gains

• TAC Security set a benchmark with listing gains of 173.58%, followed by Unicommerce (117.59%), MobiKwik (57.71%), and TBO Tek (55%).

• Ixigo, Trust Fintech, FirstCry, and Menhood also saw impressive listing gains of 30-50%, while Ola Electric listed flat without any listing gain, reflecting cautious market sentiment for the company.

Upcoming IPOs: A Promising Pipeline

Looking ahead, nearly 50 startups have expressed intentions to go public in the coming months or years with a few of them are awaiting an approval from the SEBI. This pipeline includes companies from sectors such as e-commerce, fintech, and proptech (majorly co-working). If the momentum continues, 2025 could surpass 2024’s achievements as several startups such as Bluestone, Ecom Express, PhysicsWallah, InCred Finance, Aye Finance, Ola (mobility), PayU, Ather, boAt, Pine Labs, and Zepto are likely to get listed or IPO ready in the next few months.

Conclusion

While the growing success in public markets is a great validation for the India story, especially for VCs, it is important that these firms do not shortchange public investors. With the retail segment growing manifold through mutual funds and direct participation, rumblings are already being made by regulators to control the ‘quality’ of issues hitting the market. The extra compliance costs and requirements for firms also ensure that for each firm that lists, understanding about its sector and peer group increases that much more. That is why listings by sectors that effectively did not even exist a decade back are still finding their ‘true value’, be it for the likes of Zomato, or for Mobikwik now. In a market awash with liquidity and a limited supply of new issues until recently, firms have managed to get away with pricey premiums successfully.

A year from now, if these shares do drift below say issue price due to poor performance, then the impact on the next cohort of startups could be significant. But for now, it has to be said, most have done enough to drive investor expectations further, clearing a strong path for the startups to follow. Expect 2025 to be a strong year as well. And while one expects the offer-for-sale component will stay high on the agenda, would it be too much to hope that corporate governance issues like the issue of cheaper stock weeks before the IPO will be controlled? One can hope, we guess.