Editor’s Take | The IPO gold rush is going to continue, says Nikunj Dalmia

Shares of FSN Ecommerce Ventures, the holding company of Nykaa, made a blockbuster debut on the bourses on Wednesday. Shares of the omnichannel beauty products ended at Rs 2,208 apiece on NSE against the issue price of Rs 1,125 and listing price of Rs 2,018.00. With this strong listing, FSN Ecommerce Ventures' market capitalisation soared to nearly Rs 1 lakh crore. Founder Falguni Nayar became India’s richest self-made female billionaire with her net worth crossing that of Biocon’s Kiran Shaw.
At the same time, Paytm IPO sailed through on the third and final day of the bidding process. According to the data from NSE, investors bid for 9,14,09,844 equity shares, translating to a subscription of 1.89 times. The portion reserved for retail investors was subscribed 1.65 times, whereas the quota for institutional buyers received 2.79 times bids.
Analysing the IPO rush, ET NOW’s managing editor Nikunj Dalmia says “What Nykaa has achieved is truly extraordinary. The market cap of Nykaa is now higher than companies like Tata Consumer and Britannia - companies which been in business for decades, have good cashflows and no debt.”
“But, investors need to be cautious that not every start-up can become a Nykaa or a Zomato. While the excitement is unparalleled, there is a red herring too,” he adds.
When it comes to comparing two new-age tech companies - Nykaa and Paytm, he says, “They are two completely different models. While Nykaa is not going to be a highly regulated sector, Paytm has that risk as it is in the fintech space. Markets too might take a cautious approach when it comes to Paytm listing.” But, the bottomline is that this is just the beginning of the IPO rush. “Start-up promoters want to exit and create value for their shareholders and the best way to do that is by going public,” he concludes. Watch.
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