According to those in the know, e-commerce firm FirstCry will postpone its planned $1 billion initial public offerings (IPO) by a few months. The cautious stance by the SoftBank-backed etailer followed a subdued response last week to new economic challenges, such as logistics player Delhivery, as well as larger headwinds in global markets.
The Pune-based etailer had planned to file draft IPO papers this month but is deviating from the advice of its investors and bankers, according to sources. According to the sources, FirstCry is considering ‘recalibrating’ its overall issue size and the valuation it would seek in comparison to its initial plans earlier this year.
According to ET last month, FirstCry was aiming for a valuation of close to $7 billion for a $1 billion issuance with an offer for sale (OFS) component of roughly $700 million.
FirstCry’s representative declined to comment on the situation.
Public markets have been bumpy as a result of changes in macroeconomic conditions and the present Ukraine-Russia conflict, causing even the country’s largest insurer, Life Insurance Corporation of India (LIC), to postpone its initial public offering and reduce the amount of its overall issuance.
The LIC stock is set to begin trading on exchanges on Tuesday. Delhivery had to postpone its IPO and cut its size from Rs 5,235 crore to Rs 5,235 crore.
Public markets have been bumpy as a result of changes in macroeconomic conditions and the present Ukraine-Russia conflict, causing even the country’s largest insurer, Life Insurance Corporation of India (LIC), to postpone its initial public offering and reduce the amount of its overall issuance.
The LIC stock is set to begin trading on exchanges on Tuesday. Delhivery, too, had to postpone its IPO and cut its size from Rs 7,460 crore to Rs 5,235 crore.
The other week, only 24% of Delhivery’s IPO was subscribed on the second day, indicating a lack of excitement from retail and high net worth investors, putting company insiders on pins and needles until the IPO was ultimately subscribed on the final day.
FirstCry abandoning its IPO cart comes as its largest backer, SoftBank, said that it will dramatically reduce new investments this year after posting record losses in its Vision Fund units.
According to market observers, the link between the secondary and primary markets is causing startups to postpone planned public offerings.
The share prices of the aforementioned new economy companies are trading significantly below their earlier highs, and Zomato just fell below its issue price of Rs 76 per share, setting new lows. It closed at Rs 56.75 on Friday, having recovered roughly 10% on the BSE. Paytm has lost more than 70% of its share value since its IPO at Rs 2,150 per scrip.
Changes in market sentiment are significant for FirstCry, despite the fact that it became profitable in the fiscal year 2021, with a bottom line of Rs 216 crore, compared to a loss of Rs 191 crore the previous year. Profitability in new-age enterprises has been a source of concern for public markets.
PharmEasy, which has received regulatory approval for its Rs 6,250 crore IPO, Snapdeal, Oyo Hotels & Homes, and Boat are among the other new-age companies that are delaying their IPO plans after filing their DRHPs.
