RIDING THE IPO BOOM

A BURST OF TECH START-UP LISTINGS HAS LIFTED MARKET SENTIMENT, EVEN AS CONCERNS OVER SOARING VALUATIONS LINGER

- By M.G. ARUN

WHEN BOURSES CLOSED ON NOVEMBER 18, PHYSICSWALLAH'S STOCK closed 42.4 per cent above its offer price, an emphatic market endorsement for an edtech company on its debut. For Alakh Pandey, who had grown the venture from a YouTube channel into a sprawling hybrid learning network with co-founder Prateek Maheshwari's support, it felt like vindication. As it was for a sector that many had written off post the boom years of the COVID-19 pandemic.

But PhysicsWallah was just one of five new-age technology firms that collectively sought to raise Rs 23,190 crore in the flurry of IPOs (initial public offering) in the past two and a half months. Urban Company kicked off the season in September, Lenskart followed in late October, and November saw Groww, Pine Labs and PhysicsWallah enter the markets in a single week. Across the lot, oversubscription was strong and listing-day performance broadly upbeat.

This when the start-up pipeline had thinned for much of the past three years. The exuberance of 2021—when several tech unicorns rushed to the market—had given way to a sobering correction. Many newly listed firms struggled to hold their issue prices, most notably Paytm, whose shares remain over 40 per cent below their offer price. In this backdrop, the success of this new crop has signalled renewed investor conviction in India's maturing startup ecosystem. All five have shared a common pitch to the markets, positioning themselves not as speculative bets, but as disciplined, scaled-up businesses ready for the scrutiny that comes with public ownership, especially as the nature of their valuations remains open to question at a time of global uncertainty.

HOW THE FIVE STACK UP