Moneycontrol Pro Panorama | IPO rush throws up many questions

Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

Another day, another initial public offer.

Moneycontrol has reported that Softbank-backed Oyo Hotels & Rooms has shortlisted investment bankers to raise a billion dollars through an IPO.

With the pandemic still raging on and a majority of adults in the country -- and the world -- yet to be vaccinated, and columnists writing eulogies for business travel, is this the time for a hospitality company to hit the market?

Well, who are we to ask when even Microsoft seems willing to invest at a valuation of $9 billion?

The growing queue of start-ups waiting to list has not only added glamour to the market, but also forced investors to reassess their methods for valuing companies. Several of them are loss making and their dazzling growth is fuelled by burning cash.

The unicorn charge into primary markets has also raised questions for regulators since many of these companies are not backed by promoters, a traditional concept in India with its long history of family-backed businesses.

To reflect this changing market reality, the Securities and Exchange Board of India has announced a slew of relaxations such as moving away from the traditional concept of promoters to ‘controlling shareholders’, relaxing the share lock-in period for promoters of newly listed companies, easing disclosure norms and making it easier for companies to reward employees with shares.

With several companies lining up to raise funds and with more than 50 companies achieving the unicorn status of hitting $1billion in valuation, SEBI’s rules will ease the path for these companies to get listed, says Shishir Asthana in this piece.

Away from the glitz of Internet economy unicorns, there is a steady diet of new companies for investors to choose from. Four companies are selling shares publicly this week – CarTrade Tech’s and Nuvoco Vistas’ issues opened today morning. Click on the company names for reading our independent research team’s take.

Tomorrow, Aptus Value Housing Finance India and Chemplast Sanmar open for subscription.

Our research team has also written the following notes full of investment insights:

Claims spiral, but which life insurer offers best risk-reward ratio?

Gujarat Gas: Good Q1 performance, limited upside potential

Strong order book and new products to take M&M to the next level

Hindalco: Novelis, higher aluminium prices support a strong show

IPCA Labs: Strong revival for domestic formulations

What else are we reading today?

Monsoon Watch 2021 | Uneven rains weigh on fertiliser sales

The Eastern Window | India flies its flag in the South China Sea

How a tiny chip is holding the auto industry to ransom

A consumption boom is nothing to fear (Republished from the FT)

Picks from our Technical Analysts: Suven Pharma, Motherson Sumi Systems, HDFC and Adani Enterprises

(These are published every trading day before markets open and can be read on the app)

Thank you for subscribing to Moneycontrol Pro. We would love to hear from you. Check out our offers page here for exclusive discounts on select brands and giveaways.

For any feedback on the product and suggestions please click here. We promise to read your responses although we might not be able to reply to each one individually.

Ravi Krishnan

Moneycontrol Pro