Ipl Share Price Nse – Between winter and fall tech stocks, most startup stocks have fallen between 35% and 80% of their pre-IPO levels in the past one to two years.

Market experts say one of the main reasons these companies have delayed their IPO plans is their performance in the private equity market, which has been marred mainly by inflation and deteriorating financial health.

Ipl Share Price Nse

Ipl Share Price Nse

Legacy companies like Tata Technologies, NSE India, Hero Fincorp and Orbis Financial and others like Chennai Super Kings are doing well in the privately held market.

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Covid-19 may be over for many, but the pandemic-induced market winter remains strong for the world’s third-largest startup ecosystem. Additionally, uncertainties like the Russia-Ukraine war, fears of a recession, the US Federal Reserve and other global macroeconomic issues have exacerbated startup conditions around the world and India is no exception. It is what he said.

At home, Indian startups have not only experienced a sustained funding winter, but have also seen shares of several listed new-age companies slide lower, largely due to sentiment among private equity investors and others.

A good example is the share of Paytm which was quoted at INR 2,150 per share in the capital markets and traded at INR 634 per share on the National Stock Exchange (as of April 17, 2023), a decline of 70%.

Not only this, fear of uncertainty in the country’s startup ecosystem has led many startups to postpone their IPO plans even after getting approval from the market regulator SEBI.

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It is pertinent to note that as many as 11 startups have either filed Draft Red Herring Prospectuses (DRHPs) or received approvals from SEBI for their IPO plans and only three startups including Delivery, Traxxin and Dronacharya. IPOs in 2022 when the financial winter begins.

Startups that have filed DRHPs or received market regulator approval by 2022 include Pharmeasy, Droom Technology, Navi Technology, Yatra.com, Capillary Technologies, OYO, Paymate, Go Digit Insurance, OfBusiness and Snapdeal. Interestingly, most of these startups have already issued their DRHPs with SEBI, some of them, including Go Digit, Navi Technologies, and Paymate, are still planning to go public in 2023, while a few more have filed for DRHPs or with new ones.

Piyush Jhunjhunwala, founder and CEO of a platform that facilitates trading of unlisted stocks, explained the current market situation and said, “Although India is leading the world in terms of economic growth, the Indian stock market has not shown up.” A number of international stock markets have performed well in the past three months, with many of the international stock markets outperforming their Indian counterparts.

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He said that the private market reflects the sentiment of the capital market, pointing out that technology stocks in the private market have recorded significant gains as technology startups are entering the stock exchange.

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Like Paytm, Nykaa and Zomato, most of the startup’s shares have free-falled between 35% and 80% of their pre-IPO levels within one to two years. For example, Pharmeasy, which filed its DRHP with SEBI in November 2021, recorded a free fall of 80%, from INR 125 in November 2021 to April 2023.

Ironically, at a time when all is not well, legacy companies like Tata Technologies, NSE India, Hero Fincorp and Orbis Financials and companies like Chennai Super Kings, CSK cricket team are keen on the IPL. On the unlisted market. Along with new-age pre-IPO stocks like Boat, Mobikwik and Pharm are struggling to bring in simple investors.

Before we delve into the factors that influence demand for pre-IPO stocks, let’s understand how the Indian private equity market is largely managed.

Unlisted market refers to the unofficial trading of unlisted shares of companies that are privately held or have received approval from SEBI for listing.

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A total of 5,312 companies are listed on BSE, Asia’s oldest stock exchange, and 2,113 companies are listed on NSE, another Indian stock exchange.

India is home to nearly 98,000 DPIIT accredited startups and 43 million unlisted MSMEs. Therefore, the game of mostly unlisted unlisted stocks is not small at all.

“Currently, there are 200 brokers in the Indian market and the total trading volume in the unlisted market can reach INR 10,000 Cr per year at retail,” says Stockfife’s Jhunjhunwala.

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According to Manish Khanna, founder of Unlisted Properties, these brokers can be categorized as big and small. Many brokers dealing in listed stocks have now started trading in unlisted securities as well. Small brokers try to hold privately held stocks based on the inquiries and requests they get from their clients.

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“Large and institutional brokers usually keep their own books and stocks before buying. Their clients are mostly HNIs. By keeping their own books, the details of buyers and sellers are not disclosed,” Khanna said.

Unlike smaller brokerages that may focus on over 100 companies, larger brokerages focus on where the profits are concentrated. For this reason, large brokers tend to target 30-40 companies that are highly liquid and profitable.

Additionally, these brokers use ESOPs and investor shares to facilitate trading in unlisted stocks. Khanna places its available stocks on the non-listed market in three baskets:

Pre-IPO stocks: These stocks are usually traded during the pre-IPO period, when companies file DRHPs and seek pre-IPO placements.

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“Furthermore, these stocks can be very or very less liquid. Brokers position their holdings accordingly. And of course, when the market is volatile, no one wants to keep the stock on their books,” Khanna said.

Most tech startup stocks are pre-IPO in nature and struggle to maintain their reputation in the private market.

Mobikwik, boAt and Pharmeasy have postponed their IPO plans, while there are reports that MamieRz is following suit – although the company denies that.

Ipl Share Price Nse

One of the reasons these companies are delaying their IPO plans is their underperformance in the private equity market, which is driven by high valuations and declining financial health.

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Not to get into the fine print of the startups mentioned in the above chart, Khanna said, “The reason we’re actually seeing, is the pricing gap. So if you’re actually looking for X and I’m offering something on Y, there’s a big mismatch.”

“The problem with these startups is that their initial rounds were very high and now the second round is at a steep 40%-50% discount. Even if there is a 20% to 25% discount, investors don’t want to make more than 50%,” added Khanna.

As a result, institutional deals are shrinking, impacting the number of startups and ultimately IPO plans. Much depends on the company’s financial health and valuation — both or even one or the other, say market experts.

If you look at the above chart, despite being profitable for three consecutive years, Boat’s share price has now dropped from 800 INR to 800 INR from 870 INR. This is because investors believe. It is overpriced. Initially, Boat was reportedly planning to go for IPO at around CRR 15,000 with a gray market valuation of INR 11,000 crores.

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Experts believe that the boat may now perform better by raising INR 500 Cr to INR 11,470 Crore.

But in the case of pharma, experts believe that it has already gone down and will only increase from the current share price of 25 INR.

“Ixigo is expected to drive 5x growth in the travel sector following the recovery from Covid-19. It is expected to be profitable in FY23 as it already has a positive cash flow. The stock price is already in recovery mode and has recovered by about INR 40 in the last three months thanks to positive news. This may go up,” Jhunjhunwala said.

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As start-ups do not sell like hotcakes in the unlisted market, Jhunjhunwala cites limited trading as a major factor besides their valuation.

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“In the unlisted market, very limited trading is done in startups like Razorpay, Ola, BluSmart, BYJU’S, ClearTrip, Go Digit Insurance, etc. Inventory is available for buying/selling in the unlisted market.

“Many of these companies have a lot of restrictions on transfer of shares in the private market (like ROFR) and also many company shares are held in physical form which makes it difficult to trade due to the complicated share transfer process,” added Jhunjhunwala.

At a time when startup stocks are hot even in unlisted markets, there are companies that are attracting the attention of investors due to good earnings.

Tata Technologies, NSE, CSK and Hero Fincorp are among the companies that are currently operating smoothly in the gray market.

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Talking about the high demand for these stocks, Jhunjhunwala said.

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