startups rethink ipos: Startups rethink IPOs as markets fall out of love with unicorns

Mumbai: Valuations of several new-age companies have taken a beating in the market for unlisted shares as the craze towards startups wanes, which could possibly delay their plans to go public.

PharmEasy, Oyo, Boat and Ixigo have seen a sharp fall in value in the past six months, according to people dealing in the unlisted equity market.

This could make promoters and private equity investors hesitant to go for a public issue of shares. The weak stock market performance of

, Policybazaar post their IPO will also weigh on investor minds, they said.



“Domestic investors have realised that if a private equity is taking exit in a stock, then the scope of upside in share prices is extremely minimal,” said Sarffin Financial Advisors director Rahul Thalia. “Be it (Policybazaar) or Paytm, they have shown that overpriced companies quickly lose investors’ favour; high valuations are insupportable in the longer term. Now, investors have returned to companies like NSE (National Stock Exchange) or CSK (Chennai Super Kings) where they see more value.”

The unlisted shares of PharmEasy (API holdings) are trading around Rs 45 apiece versus a high of Rs 145 expectations of listing day gains were driving shares higher. IIFL had bought a big chunk of shares at Rs 53 and offloaded the entire holding at Rs 82 in last November.

Imagine Marketing Ltd, which owns the Boat brand, has seen a sharp fall in valuation since the company’s proposed share sale buzz. From trading at a high of Rs 1,250 a few months ago, the shares are now changing hands at Rs 850-900 apiece.

Oyo, which had hit a high of Rs 130 six months ago, is now trading at Rs 90-95.

“Fancy startup shares have clearly lost sheen with delaying IPO plans,” said Tushar Bopche, cofounder at InvestValue Fintech.

“If you have surplus funds, investors can still step up on their purchase and wait for another round of surge in share prices once the IPO market revives again,” he said, adding: “Some shares have even corrected in the range of 30-50% since their peak when IPO roadshows were on.”

The shares of travel portal Ixigo seem to have lost in transit, as those are changing hands at around Rs 180 compared with Rs 220-230 earlier.

Investment bankers said these valuations reflect the reversal of fortunes in popular new-age companies in the wider equity markets.

The Paytm stock closed trading on Tuesday at 655.35, compared with its IPO price of Rs 2,150 in November last year.

PB Fintech now trades at Rs 584. The shares were sold at Rs 980 each in the IPO last November.