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February 24, 2022

India TMT IPO pipeline looks strong

India has become a digital-first economy due to rising smartphone penetration and affordable mobile internet. Consumer-facing tech start-ups are the biggest beneficiaries of this trend. According to GlobalData, India has the third-largest technology unicorn ecosystem in the world, behind the US and China.

Many unicorns in the country have entered late-stage funding rounds. This is when founders typically start weighing up their exit options and we are seeing the IPO market getting stronger in the country. From 2018 to 2020 there were 15 TMT IPOs in India. 2021 alone saw 15 Indian TMT companies going public and raising total proceeds of $4.8 billion.

Internet-driven themes propel the Indian IPO market

In 2021, listings were pushed by internet-driven themes like ecommerce and fintech—and these themes will continue to gain prominence as digital adoption in India increases. Fintech player Paytm’s listing in November 2021 was the biggest TMT IPO ever in India. It raised proceeds of $2.5 billion at a valuation of $14.5 billion. Aptus Value Housing (Loan solutions), Mobikwik (digital payments), Naapbooks (fintech solution), and Policybazaar (insuretech) were other notable fintech players that went public in 2021.

The ecommerce player Zomato’s IPO, raising $1.3 billion, was the second-biggest listing in India in 2021. It raised total proceeds of $1.3 billion at a valuation of $12.2 billion. CarTrade (online car selling platform), Easy Trip (online ticket booking), and Nykaa (online beauty & wellness) were other ecommerce companies that went public in 2021.

The IPO pipeline in India will remain strong in 2022, driven by digital themes

PharmEasy (healthtech), Delhivery (ecommerce), Oyo Rooms (online hotel booking), and Tracxn (big data) have all filed for IPOs. Other big IPOs expected on the Indian exchanges include Ola Cabs (ridesharing) and Swiggy (online food delivery).

We are also seeing an increasing number of Indian TMT companies listing in the US to achieve greater liquidity and attract a broader investor base. This is a further sign of the attractiveness of Indian tech companies. Walmart-owned ecommerce player Flipkart, for example, is preparing for a listing in the US. Edtech leader BYJU’s has also announced its plans to list in the US by merging with a special purpose acquisition company (SPAC).