8 new-age startup raise ₹27,421 cr via IPO in 2024; Ecom Express, Smartworks, Mobikwik in queue

After years of muted activity, 2024 is turning out to be the season of spring for new-age technology companies (NATCs), with eight startups listing their shares on the domestic stock exchanges. The renowned new-age technology companies (NATCs) such as Swiggy, Ola Electric, Awfis, GoDigit Insurance, TBO Tek, FirstCry, Ixigo and Unicommerce raised ₹27,421 crore via initial public offering (IPO) route, making a strong comeback after 3 quiet years. The tally is set to rise as logistics major Ecom Express, coworking startup Smartworks, and payment platform Mobikwik, having received final observation from the capital market regulator SEBI, are set to launch their IPO soon, looking to collectively raise around ₹5,000 crore from the share sale.

This year's IPO fundraising is the highest since 2021, when seven big NATCs, including Paytm, Zomato and Nykaa, garnered ₹42,826 crore through the primary market. After 2021, the next two years were a quieter period for startups, with five going public in 2023, and only three in 2022, as many of them deferred IPO listing due to valuation concerns, global tech slowdown, and weak performance of industry heavyweights Paytm, Zomato, and Nykaa.

However, with improving market conditions, premium IPO listings trends, and potential bullish factors such as strong macros and ease in inflationary pressure, several new age companies such as OYO, Zepto, PhysicsWallah and OfBusiness are eyeing stock market debut in 2025.

According to market experts, profitability focus, lower valuations, and robust IPO response coupled with strong listing performance have led to the revival of public listing in the Indian startup space.

Startup IPOs to Watch

The highly anticipated IPOs from startup space are Ecom Express, Smartworks Coworking Spaces, and Mobikwik. Ecom Express and Smartworks, which filed their IPO papers in August this year, received green signal from the SEBI on December 1, and are set to launch their IPO soon. On the other hand, Mobikwik, which received final nod from the regulator in September this year, is also gearing up to list its shares on the domestic bourses.

Ecom Express

The Gurugram-based e-commerce logistics company looks to raise up to ₹2,600 crore by public listing of shares on the domestic bourses. The IPO of MD and CEO Ajay Chitkara-led firm comprises fresh equities worth up to ₹1,284.5 crore and an offer for sale (OFS) of shares up to ₹1,315.5 crore by existing shareholders.

As per the offer document filed with the Securities and Exchange Board of India (SEBI), Ecom Express plans to tap vast opportunities in adjacencies such as quick commerce, reverse logistics, time-definite deliveries, heavy shipments, fulfilment services and modular services as well as data-led value added services.

Ecom Express is India’s only pure-play B2C e-commerce logistics solutions provider, covering first-mile pick-up, mid-mile transportation and last-mile delivery as well as reverse logistics and fulfillment services. It commands the second largest market share among its peers in terms of B2C e-commerce shipments and handled over 27% of all B2C e-commerce shipments through third[1]party logistics providers in India in FY24. As of March 31, 2024, they had the widest coverage pan-India and in Tier 2+ regions compared to their peers and covered over 27,000 PIN codes. It had 6,384 active customers, including Meesho, Amazon, Nykaa, Puma, Purplle, E-Kart and V Mart among others.

Smartworks Coworking Spaces

The office experience and managed campus platform eyes to garner capital through a mix of equity and offer for sale by existing shareholders. The IPO comprises a fresh issue of equity shares worth up to ₹550 crore and an offer for sale up to 6,759,480 equity shares of face value of ₹10 each.

Smartworks proposes to utilise the net proceeds for repayment of certain borrowings availed by the company; meet capital expenditure for fit-outs in the new centres and for security deposits of the new centres to be deployed in the financial year 2025, 2026, and 2027. The balance amount will be used for general corporate purposes.

The company is the largest managed campus operator, amongst the benchmarked peers, in terms of total stock as of March 31, 2024. The managed campus platform consists of a total super built-up area (SBA) of 8 million square feet (msf)  across 41 centers in 13 cities such as Bengaluru, Pune, Hyderabad, Gurugram, Mumbai, Noida and Chennai, with 182,228 Seats, as of March 31, 2024. As of March 31, 2024, their operational centers across India served 603 clients occupying 130,047 seats. Further, they have 618 clients with 149,660 seats, out of which 8,691 seats are yet to be occupied at their operational centers by the respective clients.

One Mobikwik Systems

The Gurugram-based payment platform plans to raise ₹700 crore by public listing of shares on the domestic bourses. The IPO is entirely a fresh issue of equity shares with no offer for sale component.

The proceeds from the fresh issue, to the extent of ₹250 crore will be used for funding growth in the financial services business; ₹135 crore for funding growth in the payment services business; ₹135 crore for investment in data, ML and AI and product and technology; ₹70.28 crore for Capital expenditure for the payment devices business, and general corporate purposes.

Founded in 2009, Mobikwik is a payment solutions company, offering services to both consumers and merchants. The company has acquired 14.69 crore registered users and enabled 0.38 crore merchants to make and accept payments online and offline, as of September 30, 2023. Its payment gross monetary value has grown at an annual rate of 32.33% and MobiKwik ZIP GMV (Disbursements) has grown at an annual rate of 354.86% from fiscal 2021 to fiscal 2023.