49% of high-level IPOs in 2021: below the sale price
Companies that raised $ 1 billion for IPOs in 2021 aren’t doing so well – half of them traded below their listing prices.
The Financial Times (FT) writes that these numbers include some of the better-known names, including food delivery app Deliveroo, payment company Paytm and alternative food maker Oatly.
The performance raises questions about company valuations, which have been bolstered by big investors like SoftBank and Warburg Pincus as stock markets around the world are doing very well.
The FT report says that among the large IPOs of 2019, 33% were below the issue price one year after entering the market. Twenty-seven percent in 2020 were in the red after one year.
The report says Deliveroo shares are down 26% on day one and are still below their listing price, while Paytm has fallen more than 40% in the first two days – suffering the biggest drop in the past. first day of all major listings – and is now considered one of the worst debuts in Indian stock market history.
Bankers said Paytm wanted to set a record for Indian IPOs. This had a negative effect on long-only investors, who had more conservative attitudes. Because of this, some hedge funds got larger allocations and then abandoned their stocks.
Meanwhile, shares of Didi Chuxing, the Chinese call-to-run app, are also down 40%.
FT blames Beijing’s crackdown on technology, which occurred after Didi was listed in New York City against regulators’ advice.
PYMNTS writes that Paytm revealed that it saw its net loss increase by 8.4% as its expenses increased. This came as FinTech released its results publicly for the first time since its stock market debut in November 2021.
Read more: Paytm sees net loss increase with spending
The company said it consolidated a net loss of 4.74 billion rupees, an increase from 4.37 billion in the same period in 2020.