More on Startups
Boat shares in turbulence in unlisted market
Indian start-ups are going through a churn. But this churn is not just on the employees front, with many bringing down their staff count. The trouble is beyond that, which is reflected in how IPO-bound start-ups are viewed by investors- mainly retail. One such saga is of Boat, known for its headphones and speakers, which is witnessing a flux in the unlisted market, which is more commonly referred to as the grey market.
A trend picked up from the trading price list of Unlistedzone.com shows that since this company started trading in the unlisted market, its price has fallen significantly. While it was trading at above Rs 1,300 in the early part of this year, Boat’s share prices have dipped and are currently trading at Rs 950.
The start-up had announced its plan to list on the bourses earlier this year, which could be delayed with the markets going through a rough patch. It filed its DRHP in January 2022 for a Rs 2,000 crore IPO.
Umesh Paliwal, the co-founder of Unlistedzone.com, says that Boat’s volumes are down 70% in the market since it started trading in the grey market. “There is no demand for Boat and also other start-ups in the unlisted space. This is largely because there is a lot of scope to invest in these start-ups in the listed space”, said Paliwal.
Major IPOs like Paytm and Zomato have been dampeners since their listing. The most awaited IPO- Paytm, was the biggest blow in recent times as the company listed at a discount from its issue price and has continued to fall even further. The stock listed at Rs 1,950 per share on the NSE, a 9% discount from its IPO issue price of Rs 2,150 apiece. Now, it is trading at less than half that price at around Rs 711 per share.
Zomato, which had a bumper listing on D-street, has witnessed a slide in its shares. Its shares opened at Rs 116 on the NSE, a 52.63 percent premium to its final offer price of Rs 76 a share. Now it is trading around Rs 56 apiece.
Paliwal says, overall, investor interest in start-ups is down as start-ups could be delaying their IPOs due to heavy ups and downs in the market in the last few months.
The unlisted or grey market has been a place for people to accumulate stocks of highly valued or highly anticipated companies before the IPO by investors who want a slice of the company even before the listing. Companies like Paytm, Zomato, and Nykaa were among the ones that were traded heavily in this market before their IPOs. The listing price in the grey market is usually used to gauge whether the IPO would be a success or not. Most importantly, it would indicate if the listing could be at a discount or a premium.
2022 has not been a particularly good year for start-ups, with 12,000 employees losing their jobs in India. This number may touch 60,000 by the end of the year due to the economic slowdown.