Our previous articles on the basics of an IPO and what you need to know when applying for one give you a better understanding of the concept. This article talks about the upcoming IPOs in India in 2021. We have picked 4 famous companies expected to go public and compiled interesting trivia about them.
This article covers:
Life Insurance Corporation of India (LIC)
If you are an Indian, you surely must have heard of LIC at least once in your life. Your elders or relatives should have taken life insurance from LIC, a government-owned insurer established way back in 1956. LIC is the biggest insurance company in India out of 24 life insurance companies.
You would be surprised to know that the asset under management (AUM) of LIC is Rs 33.2 lakh cr ($450+ bn) with a claim settlement ratio of 97.8%. Life Insurance Corporation of India is undoubtedly the market leader in the life insurance space with a 71% market share; 24 other life insurance companies combined have a remaining 29%.
One of the interesting things about LIC is that it is the biggest institutional investor in the Indian stock market, with 330 companies in its portfolio amounting to Rs 6 lakh cr. The fun fact is that this is just 19% of their total investment; the remaining 81% is in government bonds. This is undoubtedly one of the most awaited upcoming IPO in 2021.
Apart from enjoying the gastronomic delight, you can now make money via Barbeque Nation as it will soon be launching its IPO. This restaurant chain was started back in 2006 in Mumbai with one outlet. As of 2021, they have 138 operational restaurants globally, 5 of them being in the UAE and one each in Oman and Malaysia.
The idea of such a venture came to Prosenjit Roy Choudhary in Indore, where he used to serve kebabs to customers in a hotel. The customers complained that kebabs were not hot and were uncooked. He went back home, and the same night he saw a TV program that gave him the idea of serving 95% cooked kebabs while the customers could cook the remaining 5% on a grill attached to their table. This became the genesis of ‘Do It Yourself’ dining, which later turned into a successful restaurant chain.
Did you know that the big bull, through its investment arm Alchemy Capital, owns 2% equity shares of Barbeque Nation Hospitality, Barbeque Nation restaurants’ holding company? This is unarguably an IPO India is waiting for.
Nykaa was started in 2012 by Falguni Nayar and has already gained the prestigious ‘unicorn’ status in less than a decade. This e-commerce-turned-omnichannel lifestyle retailer has raised a total of $25 mn from many venture capital and private equity investors in several rounds of funding.
What started as a small online company for cosmetics, Nykaa today has over 3 lakh products from 1,500 brands. As of 2020, they sell 25 products every minute, which speaks volumes about their penetration in the country as they are serving 17,000 pin codes. They are witnessing a colossal increase of 400% in their order volumes on a y-o-y basis.
Nykaa achieved its breakeven in 2018, and in the financial year 2018-19, they had a profit of Rs 2.31 cr. They are EBITDA positive already and are taking on other e-commerce stalwarts in India. Nykaa has just 600-700 employees, and with these limited resources, they are competing against giants like Flipkart, who have 30,000+ employees and have not even achieved breakeven yet. Indeed, Nykaa is a worthy upcoming IPO in 2021.
National Stock Exchange (NSE)
You must be amazed to see this name on the initial public offering (IPO) list since a company’s IPO is launched on NSE. You would also be astonished to know that the Bombay Stock Exchange (BSE) is listed and actively traded on NSE.
National Stock Exchange came into existence in 1994 as the first Demat electronic exchange in India. Do you know that the electronic trading you do on screens today started with the birth of NSE itself? NSE is the biggest stock exchange in India today based on the cumulative daily value of equity trading.
NSE was also the largest stock exchange in the world in 2019 for derivatives (Futures and Options) trading with 5.96 tn derivative contracts that year. NSE is expected to go public by the end of this year, and other IPO details are available online.
Apart from these iconic companies, many others are launching IPOs this year: Bajaj Energy, Studds Accessories, Grofers, and PNB Metlife Insurance, to name just a few. In a nutshell, this year will surely be a bonanza for IPO investors. Happy investing!