The Week that Was: Indian Startup News Overview (12-16 July)
The hotcake of the week, Zomato IPO which began on July 14 is closing today. Following this paytm is all set to raise funds through biggest Indian IPO. In addition, there were many other startups too that went public this week and also some have initiated ESOP buyback. Scroll down for such recent news about the startups across India.
Paytm Money, an online retail brokerage, has launched a new feature that allows customers to pre-book IPO allotments before market hours, according to CEO Varun Sridhar.
The announcement comes as several high-profile startups and corporations, including Zomato, Life Insurance Corp of India (LIC), Paytm, PolicyBazaar, Care Health, and Nykaa, prepare to list on Indian stock exchanges in the coming months.
Retail investors will be able to request Initial Public Offering allotments prior to the official opening of subscriptions on exchanges. Typically, an investor can only purchase allotments on days when subscriptions are open.
According to an Ola press release, Ola Electric and Bank of Baroda signed a 10-year $100 million debt to fund and close Phase 1 of the Ola Futurefactory, Ola's global manufacturing hub for its electric two-wheelers. This is one of the country's largest long-term debt financing agreements in the electric vehicle industry.
The news comes just days after Ola, the ride-hailing giant, raised $500 million from Temasek and Warburg Pincus ahead of its initial public offering (IPO). Aggarwal, the company's CEO and cofounder, also contributed an undisclosed amount to the round.
Ola announced last December that it would invest Rs 2400 crore in the first phase of the factory. The company plans to develop a 500-acre site in Tamil Nadu, India. It will be the world's largest two-wheeler factory when it reaches full capacity of 10 million vehicles per year.
According to sources, Walmart-owned Flipkart will buy back employee stock options worth approximately Rs 600 crore. Earlier in the day, Flipkart announced that it had raised $3.6 billion (approximately Rs 26,805.6 crore) in funding from a group of investors, valuing the e-commerce giant at $37.6 billion (about Rs 2.79 lakh crore).
According to sources, the employee stock option buyback will cost around Rs 600 crore, and employees will be able to liquidate up to 10% of their vested shares depending on their holding pattern. They also stated that the buyback is expected to benefit approximately 6,000 people.
Evrey week we have edtech startups raising funds and this week we have Upgrad. Temasek Holdings of Singapore and the World Bank's arm IFC have invested an additional Rs 220 crore (USD 29.5 million) in leading online education platform Upgrad, which focuses on upskilling/reskilling professionals, by purchasing out employees' equity holdings through Esops.
Upgrad received USD 120 million from Singaporean investment giant Temasek Holdings and USD 40 million from the International Finance Corporation in its first external fund raising in the last week of April, in which the promoters divested 25% of their equity.
Upgrad co-founder and chairman Ronnie Screwvala told PTI on Tuesday that Temasek and IFC injected an additional USD 29.5 million or Rs 220 crore into the company by purchasing the Esops (employee stock option scheme) from around 37 employees.
On July 13, Zomato raised Rs 4,197 crore from 186 anchor investors, a day before the food delivery and restaurant aggregator business launches its initial public offering (IPO) for retail investors.
According to multiple media reports citing sources, Zomato received approximately 30-35 times more bids from anchor investors than it intended to sell in the first place.
Among those who received more than 2% of the anchor book were the Government of Singapore, Morgan Stanley Investment Fund, Tiger Global Investment Fund, Baillie Gifford Pacific Fund, Fidelity Fund, New World Fund, Canada Pension Plan Investment Fund, and Kotak Flexi Cap Fund.
With this IPO, Zomato hoped to raise 9,375 crore. InfoEdge will issue approximately 9,000 crore in a new issue and 375 crore in a secondary issue. The company will launch its initial public offering (IPO) for retail investors on Wednesday, July 14, at 10 a.m., with a price range of 72-76.
Fractal Analytics Inc., a provider of artificial intelligence and analytics solutions to global corporations based in India, is considering an initial public offering to fuel its growth as the pandemic increases demand for its services.
The AI firm offers services in the consumer packaged goods, insurance, healthcare, life sciences, retail and technology, and financial sectors. It is headquartered in New York and has offices in the United States, the United Kingdom, and India, as well as fifteen other countries.
In addition to considering an IPO, Fractal is evaluating interest from investors who value the company at significantly more than $1 billion, according to Srikanth Velamakanni, co-founder and CEO, in a video interview on Tuesday. So far, it has received $325 million in funding from investors such as Apax Partners.
As a per the company's plans to recover from the pandemic's second wave, Oyo Hotels & Homes has closed a $660 million debt financing round from global institutional investors to service existing loans.
According to sources, Wall Street investors such as Fidelity, Citadel Capital Management, and Varde Partners have subscribed to Oyo's term loan B (TLB).
Oyo did not reveal the names of the investors who took part, but said its TLB was "oversubscribed" nearly 1.7 times over, with a total commitment of nearly $1 billion.
Because of the high level of interest from these institutional investors, Oyo increased the offering size by 10% to $660 million, up from $600 million initially. According to the company, this resulted in the total financing being raised at an interest rate of 825 basis points, compared to the initial price guidance of 850 basis points.
One97 Communications Pvt. Ltd., the parent company of Paytm, has filed draught papers with India's markets regulator to raise Rs 16,600 crore ($2.2 billion) in what is expected to be the largest Indian initial public offering (IPO) in at least a decade.
According to the draught red-herring prospectus the Paytm IPO would include a fresh issue of shares worth Rs 8,300 crore ($1.1 billion) and an equally large secondary share sale.
Significant investors will sell shares through an offer for sale, including China's Ant Group and Alibaba Group Holding Ltd., as well as Japan's SoftBank Group Corp. and Elevation Capital (OFS).