Startups that are likely to go for an IPO in 2021

The year 2020 has been an ominous one, many people will agree. But it also brought about a certain change in the air of the startup ecosystem. There has been a boom in investments and consumer interest. In fact, the Edtech industry has completely reimagined itself to match up to the demand for education via the digital medium. For instance, Byju's and Unacademy clearly the rising startups in the country. Further, from funding to expansions and acquisitions startups have seen growth twice that we might have seen a decade ago. The next milestone for these rising stars will be "going public".

According to an Entracker report, Zomato has converted itself from a private company to a public limited company ahead of its IPO. The company passed a special resolution on April 5, 2021. It has renamed itself to Zomato Limited effective from April 9 onwards. Now, while Zomato is a clear winner when it comes to buzz in the IPO direction, a few more have joined the league. In recent developments, PolicyBazaar and Nykaa will be filing for IPO in the latter half of 2021.

By March 2021, only two startups have gone for IPO - Nazara Technologies and EaseMyTrip. As the number turns to 5, it could better news than 10 Unicorn startups by April. Moreover, over 25 startups are looking for an IPO in the coming 2-3 years. Some prominent names include Paytm, Byju's, Delhivery and Pine Labs.

Has SEBI made it easy for startups to file for IPO?

Well, yes. While we have heard talks of IPOs all through 2019, and 2020, none of India’s unicorns meet public listing guidelines in India. These startups had to return profits for at least three years. Since profitability is a key criterion for companies to get listed on the main board of stock exchanges, SEBI created an alternative listing platform called Innovators Growth Platform for new-age entrepreneurial ventures in 2019.

But now, it has introduced some changes to make IGP better suited for an IPO-bound startup. It has reduced the time from two years to one where early-stage investors had to hold 25% of the pre-issue capital. Now, startups can also allot, from the IPO, upto 60% shares to any sizable investor.

With these regulatory changes, the Indian government too seems to be welcoming tech IPOs.