Upcoming IPOs In 2022

The year 2021 was a roller coaster for initial public offerings (IPO) in India. For the most part, new companies listed on the bourses performed well, but towards the end, there were debacles such as Paytm. 

India saw a record number of companies getting listed on stock exchanges in 2021. The reasons included a pro-business stance taken by the Reserve Bank of India (RBI) and the government that led to an influx of foreign money. Other than this, digitalization, infrastructure and manufacturing saw a boost. Moreover, there was a significant increase in the number of participating investors.

In the upcoming year, the high momentum is expected to continue with some big companies getting listed on the exchanges. Here are some of the upcoming IPOs in 2022 to look forward to –

LIC IPO

The Life Insurance Corporation, India’s largest insurance company and the government’s most profitable enterprise, is expected to have its IPO in the final quarter of FY 2022. It will be India’s biggest-ever IPO with the government selling between 5% and 10% of its stake in the company. 

The government aims to raise between Rs 600 billion to Rs 800 billion by disinvesting its stake in the insurance company.  LIC is said to have ample cash reserves and made a profit of Rs 100 billion in just April to June this year. It dominates the insurance market, holding a 49.8% market share while the remaining 50.2% is held by private firms.

Moreover, the government has expressed willingness to allow foreign investors to hold 20% of the stake in LIC through the IPO. There’s also a possibility that the government will make amendments to the foreign direct investment rules, allowing such investors to buy the stake without seeking government approval in the automatic route.

Byju’s IPO

Byju’s is another IPO to look forward to in 2022. The edutech startup is expected to go for listing in the second quarter of FY 2022. Byju’s seeks to raise $400 million to $600 million through the upcoming IPO. 

Byju’s is in discussions with its bankers for a valuation of $40 billion to $50 billion. Currently, it is valued at $18 billion. The education platform is widely considered India’s highest valued startup, with backing from Naspers, Tiger Global Management, Silver Lake Management and the Chan-Zuckerberg Initiative.

Byju’s is said to be aiming for a profit margin of 20% and a Rs 100 billion revenue in FY 2022.

Delhivery IPO

The logistics company Delhivery is all set to hit the exchanges in the next financial year as well. It has already filed its draft red herring prospectus (DRHP) with Sebi. Delhivery aims to raise $400 million to $500 million through its IPO 2022. 

The delivery company’s issue size will be Rs 74.6 billion, with Rs 50 billion in fresh issue and Rs 24.6 billion in offer for sale. Overall, Delhivery’s valuation is expected to rise to $5.5 billion with the IPO. Existing shareholders who plan to sell their stake in the logistics platform are Times Internet of (Rs 3.3 billion), Carlyle (Rs 9.2 billion), China Momentum Fund (Rs 4 billion) and SoftBank (Rs 7.5 billion).

The company had issued bonus shares to its shareholders in its Extraordinary General Meeting (EGM) in September. It intends to use its IPO funds for organic and inorganic funding growth initiatives.

Ola IPO

The cab-hailing service plans to get listed on the exchanges in early 2022. The aggregator plans to raise $ 1.5 billion to $ 2 billion. Should it succeed, the company will become valued at $12 billion to $14 billion. 

In this IPO, Ola plans to raise half of its targeted capital through primary issue and the rest through an offer for sale. Ola is a profitable company, unlike many of its fellow startups, making an operating profit of  Rs 898 million in FY 2021. In the year-ago period, it made a loss of  Rs 6.1 billion. Such a profit was made possible by Ola cutting its costs and reducing its workforce.

Recently, Ola raised $500 million in a pre-IPO round and acquired Pune-based geospatial company GeoSpoc.

Conclusion

Several other big names will list for IPO 2022 apart from the four discussed above. These include OYO, PhonePe and Flipkart. Should liquidity remain high and the momentum sustain, the upcoming financial year will also see a number of successful IPOs.

A definitive rise in the number of investors willing to invest in upcoming IPOs saw a rise during the COVID-19 pandemic. More and more individuals from tier-2 and tier-3 cities participated, increasing the overall number of investors and traders in the market. Online tools and a wealth of apps and platforms helped make application, education and reaping the benefits of stock market investment easier for investors all over India.

Read more to know about upcoming ipos in December 2021