The Indian stock market has바카라 웹사이트been having an바카라 웹사이트exciting year with IPO listing of new-age companies like Zomato,바카라 웹사이트Nykaa,바카라 웹사이트and바카라 웹사이트Paytm,바카라 웹사이트while바카라 웹사이트MobiKwik, PolicyBazaar, and more are on the cards. One remarkable feature of these new-age IPOs, so far, was the desire of the early-stage investors’ to partially, or fully, exit these no-profit, or low-profit, companies. Another, equally outstanding, trait was the lapping up of shares by mutual funds and retail investors.
Profitable exit from an unprofitable company is a recurring theme in the relation between rich family offices,바카라 웹사이트private바카라 웹사이트equity firms and바카라 웹사이트public바카라 웹사이트offers, post-pandemic. Large OFS begs attention to the question that if these new age companies offer high hope and huge potential in future then why바카라 웹사이트are바카라 웹사이트these early-stage investors selling their shares in these Unicorns?
While capital market veterans feel perplexed at the sky-rocketing valuations of IPOs of companies that바카라 웹사이트have바카라 웹사이트never made profits, the early-stage investors of such new-age IPOs are laughing their way to the bank.
Initial Public Offering바카라 웹사이트(IPO)바카라 웹사이트of any company consists of two parts:바카라 웹사이트One is fresh issuance of shares by the company and second is OFS바카라 웹사이트where early stage investors or company promoters sell their shares, encashing the risk and pains they took in raising and developing the company. A large part of fresh issuance of shares is made when companies have large working capital requirements that cannot be met by internal cash flow generation through operations and early investors’ reluctance to infuse more equity.바카라 웹사이트바카라 웹사이트
The entry of over a million new retail investors every month since April 2020 coupled with deleveraging of debts by companies has invigorated the market to scale astonishing heights, all바카라 웹사이트thanks to the buoyancy in Indian equity markets. It has also ushered a golden period of lucrative exit opportunities for the early-stage investors of loss-making or merely-profitable unicorns.
Year to date, approximately 62 percent of all IPO money was바카라 웹사이트OFS바카라 웹사이트where existing investors and promoters sold their shares to retail public and mutual funds. According to Value
Research data, year to date, 49 IPOs had raised Rs 1,01,053 crore, of which Rs 62,077 crore was OFS. Out of the 49 IPOs that have come so far, 11 IPOs were complete OFS, and 26 IPOs had 70 per cent of the OFS. In the last calendar year, there were just 3 IPOs out of 16 that had a complete OFS portion.
So, why are so many IPOs predominantly raising money through OFS, suddenly? And does it even matter how companies are raising money- be it Fresh Issuance or OFS? While it does not really make any difference for the company itself, it does matter to the promoters and early-stage investors who want to encash the stock market frenzy.
Take the case of Nykaa that got listed this week.바카라 웹사이트바카라 웹사이트
Nykaa IPO raised Rs 5,350 crores for its parent company FSN E-Commerce Ventures Limited through which early stage investors sold shares worth Rs 4,720 crores to retail investors, mutual funds and other financial institutions.
The early stage investors of Nykaa are primarily rich family offices and바카라 웹사이트HNIs, including the Sanjay Nayar Family Trust, the family of both Sanjay and Falguni Nayar. Sanjay,바카라 웹사이트a former CEO바카라 웹사이트of Citigroup라이브 바카라 Indian operations, is currently the바카라 웹사이트chairman of the Indian arm of the global바카라 웹사이트private바카라 웹사이트equity giant KKR.
Over 88 percent of the IPO was바카라 웹사이트OFS, fresh issue of shares in the Nykaa IPO was less than 12 per cent which indicated that the company라이브 바카라 IPO was primarily aimed at providing an exit route to early stage investors.
The Promoter, Sanjay Nayar Family Trust sold 48 lakh shares through OFS route in this IPO. At an offer price of Rs 1,125 a share, the trust made an exit worth Rs 540 crore. After the IPO the trust라이브 바카라 holding came down to 10.58 crore from 11.06 crore and it still holds 22.4 percent of Nykaa.
Similarly, a few other early stage investors like TPG Growth IV fund made a partial exit by offering 54.21 lakh shares, Lighthouse India Fund III sold 48.44 lakh shares, Yogesh Agencies and Investments Pvt Ltd sold 25.38 lakh shares and JM Financials and Investment sold 9.14 lakh shares.
A few바카라 웹사이트HNIs바카라 웹사이트too made a killing on the back of the IPO frenzy. Harinder Singh Banga jointly with Indra Banga sold 1.02 crore shares and Sunil Kant Munjal sold 70.5 lakh shares under OFS route.
With a paltry 62 Crores profit the current market capitalization of Nykaa is over 1바카라 웹사이트lakh crore바카라 웹사이트while with 2,000 percent more profits바카라 웹사이트than Nykaa, FMCG giant ITC라이브 바카라바카라 웹사이트market바카라 웹사이트cap is merely three times that of the e-commerce바카라 웹사이트cosmetic seller.
Large scale selling of Nykaa shares by early investors on the backdrop of high market capitalization provided by overly optimistic investors is baffling many market veterans.
As per a Tweet by Nikhil Kamath, Co-founder of brokerage firm Zerodha:바카라 웹사이트“Nykaa lists at 1600 times바카라 웹사이트price to earnings…best thing for a value stock investor might be to go on a really long holiday right about now.”
Speaking with 바카라 Money, Hemang Jani, Head of Equity Strategy, Broking and Distribution, Motilal Oswal Financial Services viewed that the substantial valuation received by such IPOs, this year, reflects바카라 웹사이트on바카라 웹사이트the growing appetite of the retail investor to be part of new age growth companies.
“IPO now stands for ‘Its Probably Overpriced’바카라 웹사이트and there is not much left for retail unless they hold it for a decade or so,” he said. 바카라 웹사이트바카라 웹사이트바카라 웹사이트바카라 웹사이트바카라 웹사이트바카라 웹사이트
