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Think Initial Public Offers (IPOs) are a sure-shot, quickfire method to make a quick buck? If so, then investing in some of India's biggest IPOs to date would have created multiple millionaires. However, if the data is to be believed, 18 out of India's top 30 IPOs by way of size have failed to deliver on the returns front. Recent data from Capitalmind PMS suggests that of all the mega IPOs India has seen in the past 2 decades, only 12 IPOs i.e. stocks of 12 companies have delivered more returns that what you would have received, had you bought and held your investments in Nifty500(which invests in biggest 500 companies by market size). Infact, Paytm (54%), <keyword id="20024191" type="General" weightage="20" keywordseo="Reliance-Power" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Power" meta.hostid="261" meta.entityid="Reliance Power">Reliance Power</keyword> (81%), General Insurance Corporation (2%) actually generated negative total returns to date. The only outliers in the list of top 10 IPOs were Zomato (listed in July 2021) and Coal India (listed in April, 2010), which managed to generate excess returns i.e. more than what was generated by Nifty500. While Zomato's total return to date, which is considered a comprehensive gauge of a stock's profitability, stands at 265%, Coal India total returns are a massive 443%. In these cases, had you simply bought and held the Nifty500 index for a similar duration, your returns would've been 73%, and 435% respectively. Also, 5 of the biggest IPOs India has ever seen (Bajaj Housing Finance, Bharti Hexacom, Brainbees, Ola Electric) have come in the last 2 years. In some cases, having stayed put in your index investments would have yielded you far better returns. Consider this, FSN E-Commerce, Nykaa's parent company, listed on the exchanges on November 2021. Its total returns till date have been 2%, while had you invested in Nifty500 index, your returns would've been 53%. Similarly, the total returns to date on Bandhan Bank's stock, which listed in March 2018, was a negative 43%. But, the index has delivered a whopping 163% returns during the same time. Hits and Misses <table class="redcator-table-advance"><tbody><tr><td>Company Name</td><td>Total Returns to Date (In %)</td><td>CNX (Nifty500) Returns (In %)</td></tr><tr><td>Reliance Power (Feb 2008)</td><td>-81</td><td>961</td></tr><tr><td>Zomato (July 2021)</td><td>265</td><td>73</td></tr><tr><td>Gland Pharma (November 2020)</td><td>14</td><td>124</td></tr><tr><td>NHPC (September 2009)</td><td class="se-table-selected-cell">389</td><td>961</td></tr><tr><td>Indian Railways Finance Corporation (January 2021)</td><td>582</td><td>109</td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source: CapitalMind PMS <h2>Surge in IPOs? Not really </h2>It is impossible to overlook the sheer number of public offerings seen in the Indian markets over the past 2 years. Around 600 share sale offers have already hit the market since 2023. Out of these, 335 have come in this year, as of October 2024. While over Rs 50,000 crores have been raised by these share sales so far since 2023, only 22% of these funds raises have come from companies who are hitting the market for the first time i.e. bringing out their IPOs. The rest have come from already listed companies seeking to raise more funds. The biggest IPO that India has seen to date, that of <keyword id="19906087" type="General" weightage="20" keywordseo="Hyundai" source="keywords" meta.keywordsubtype="org" meta.entityname="Hyundai" meta.hostid="261" meta.entityid="Hyundai">Hyundai</keyword> Motor India, closes for subscription today. With an offer size of Rs 27,870.16 crore, it is 35% bigger than the previous biggest IPO in the country(LIC in May 2022). As of 12:30 pm today, Hyundai's offer had been 87% subscribed, with significant interest from QIBs and employees. At 0.43x, participation of retail investors remained largely subdued. Notably, an IPO is considered cancelled and withdrawn, if it fails to meet the 90% subscription threshold.

Do large IPOs guarantee large returns? Data suggests that 18 of India's biggest 30 IPOs did not generate solid returns

Over the past few months, there’s been a lot of brouhaha about the lagging pace of bank deposits in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialization of household savings in the country, or the rising preference of Indians towards mutual funds and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian equity markets through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by <keyword id="20250971" type="General" weightage="20" keywordseo="franklin-templeton" source="keywords">Franklin Templeton</keyword>, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are <keyword id="4000333" type="General" weightage="100" keywordseo="household-deposits" source="Orion">household deposits</keyword> really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. Also, we can’t forego the fact that the share of Indian <keyword id="20319599" type="General" weightage="20" keywordseo="households" source="keywords">households</keyword> in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and savings account deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (<keyword id="19942037" type="General" weightage="20" keywordseo="central-board-of-direct-taxes" source="keywords">Central Board of Direct Taxes</keyword>) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of <keyword id="20930760" type="General" weightage="20" keywordseo="securities-transaction-tax" source="keywords">Securities Transaction Tax</keyword> (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell equity mutual funds, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by equities can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in deposit growth we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the <keyword id="19900043" type="General" weightage="20" keywordseo="fed" source="keywords">Fed</keyword> recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next <keyword id="19918491" type="General" weightage="20" keywordseo="mpc" source="keywords">MPC</keyword> (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day.

A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<keyword id="21675598" type="General" weightage="20" keywordseo="Indian-wrestler" source="keywords">Indian wrestler</keyword> and <keyword id="20397249" type="General" weightage="20" keywordseo="Olympian" source="keywords">Olympian</keyword> <keyword id="19895499" type="General" weightage="20" keywordseo="Vinesh-Phogat" source="keywords">Vinesh Phogat</keyword> delivered a brilliant start to her <keyword id="20006192" type="General" weightage="20" keywordseo="Paris-Olympics" source="keywords">Paris Olympics</keyword> campaign as she defeated the top seed and the <keyword id="22687883" type="General" weightage="20" keywordseo="Tokyo-2020-champion" source="keywords">Tokyo 2020 champion</keyword> <keyword id="22687412" type="General" weightage="20" keywordseo="Yui-Susaki" source="keywords">Yui Susaki</keyword> of Japan in the women's 50kg freestyle round of 16 match on Tuesday. Susaki was leading 1-0 at the end of the first period, but Vinesh made a brilliant turnaround in the second period, outdoing her Japanese opponent by miles to secure a 3-2 win to make way to QFs. She will be going up against the 2019 European Champion, Ukraine's Oksana Livach in the quarterfinals, as per Olympics.com. Yui is not only the defending champion but also a three-time world champion in the 50 kg freestyle category and the current Asian level champion. Nisha Dahiya's Paris Olympics campaign met an unfortunate end as she succumbed to North Korea's Pak Sol Gum in the quarterfinals of the women's 68 kg competition on Monday. Dahiya faced a 8-10 lost to Sol Gum. At one point, she was leading by 8-2, but she faced an injury and had to take some medical timeouts. Sol Gum took a full advantage of her opponent's injury and made a comeback which was just good enough to help her win the match. In the round of 16, Nisha had defeated Tetiana Sova by 6-4 at the Champs de Mars Arena. Nisha could just make it to the quarterfinals in her debut Olympics. Sova led 4-1 after the first round, but Nisha fought back in the second round to get five more points and turn around the contest in her favour. A total of six Indian wrestlers will be competing at the Paris Olympics from August 5 to 11. Two-time Olympian Vinesh Phogat will be competing in the women's 50 kg category, having featured in 48 kg in the Rio 2016 Olympics and 53 kg in the Tokyo Olympics 2020. Antim Panghal, who had won a Asian Games bronze last year, will be making her debut at the Olympics in the women's 53 kg category. She secured her quota for the Olympics with a World Championships bronze medal last year. Commonwealth Games silver medallist Anshu Malik (women's 57kg), and U-23 world champion Reetika Hooda (women's 76kg) are the other Indian wrestlers who will be competing in the Olympics for the first time ever. Aman Sehrawat will be India's sole representative in men's wrestling, competing in freestyle wrestling. An Asian Games bronze medalist, he will in action during the men's 57 kg freestyle wrestling. India has secured seven wrestling medals at the Olympics: two silver and five bronze medals. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/unicommerce-esolutions-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/112307438.cms" target="_blank">Unicommerce eSolutions IPO – Price band to risk factors, all you need to know</a><a href="https://www.businessinsider.in/sports/news/neeraj-chopras-paris-olympics-journey-to-begin-with-qualification-round-today-top-rivals-to-look-out-for/articleshow/112311760.cms" target="_blank"></a> <a href="https://www.businessinsider.in/sports/news/neeraj-chopras-paris-olympics-journey-to-begin-with-qualification-round-today-top-rivals-to-look-out-for/articleshow/112311760.cms" target="_blank">Neeraj Chopra’s Paris Olympics journey to begin with qualification round today – top rivals to look out for</a><a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/electric-two-wheeler-sales-cross-the-1-lakh-mark-after-four-months-ola-electric-leads-the-market/articleshow/112288793.cms" target="_blank">Electric two-wheeler sales cross the 1 lakh mark after four months, Ola Electric leads the market</a>

Paris Olympics: Vinesh Phogat secures big win to reach women's 50 kg freestyle QFs

<ul class="summary-list"><li>Reddit went public Thursday after raising $748 million in its initial IPO.</li><li>IPOs are normally a day of celebration for companies.</li></ul>IPOs are typically a day reserved for celebration. But it's not all sunshine and roses for Reddit, whose co-founder and early investors are bickering on social media.Alexis Ohanian, who co-founded Reddit in 2005 alongside Steve Huffman, <a target="_blank" href="https://twitter.com/alexisohanian/status/1770883124915834922?s=20">took to X</a>, formerly known on Twitter, on Thursday afternoon to call out Initialized Capital — the VC firm that he co-founded with Y Combinator's Garry Tan — for not congratulating him by name in the firm's post about the <a target="_blank" href="https://www.businessinsider.com/who-got-rich-reddit-ipo-2024-3">company's IPO.</a>"Great to see our portfolio company @reddit debut on the NYSE! congrats to Steve Huffman, and the team," Initialized Capital posted on X Thursday afternoon.In response, Ohanian quoted the posts and tagged the accounts for Tan and Initialized managing partners Brett Gibson and Jen Wolf.Wow, this is petty, @GarryTan, @brettdg, @jenhwolf — even for y'all," he wrote.<div type="image" title="Screenshot of a twitter post made by Alexis Ohanian calling out Initialized Capital for not congratulating him by name for Reddit's IPO." height="693" width="590" msid="108688910" hostid="261" sizebytes="59888"></div>Ohanian and Tan created <a target="_blank" href="https://www.businessinsider.com/initialized-capital-promotes-jen-wolf-president-2021-5">Initialized</a> back in 2011 to focus on seed investing, and the firm has written early checks for startups including Instacart, Rippling, and Coinbase. It also invested in Reddit's 2012 Series A funding round.He left Initialized in 2020 to launch the VC firm 776, which has primarily invested in early-stage crypto startups. The move came just weeks after Ohanian, who stepped away from Reddit's day-to-day operations in 2018, <a target="_blank" rel="" href="https://www.businessinsider.com/reddit-board-of-directors-michael-seibel-replaces-alexis-ohanian-2020-6">resigned</a> as a board member in the wake of George Floyd's murder and implored the company to <a target="_blank" href="https://www.businessinsider.com/reddit-board-of-directors-michael-seibel-replaces-alexis-ohanian-2020-6">replace him</a> with a Black person.Michael Seibel, a colleague of Tan's at Y Combinator, took over his seat, becoming the first Black board member in Reddit's history.Reddit first sparked rumors it planned to go public in early 2022, when it confidentially filed for an initial IPO and stated plans to potentially go public by <a target="_blank" href="https://www.bloomberg.com/news/articles/2022-01-07/reddit-is-said-to-tap-morgan-stanley-goldman-sachs-for-ipo">March of that year</a>. The market, however, has been shaky during the past two years, making it less desirable to go public and causing several companies to put off pursuing an IPO.<a target="_blank" href="https://www.businessinsider.com/instacart-ipo-billions-sequoia-2023-9#sequoia-capital-venture-investors-in-instacart-16-billion-1">Instacart broke open the IPO market</a> in late 2023, but its <a target="_blank" href="https://www.businessinsider.com/understanding-instacarts-ipo-flop-grocery-business-hard-2023-9#:~:text=This%20is%20one%20of%20the,or%20more%20are%20pretty%20solid.">public offering flopped</a> and likely had a cooling effect on other late-stage startups weighing whether they should go public.Reddit's first day on the New York Stock Exchange, however, has been a success: the company set its initial share price at $34 Wednesday night and opened Thursday morning at $47 apiece.On Tan's personal X profile, he did tag both Ohanian and Huffman in a post congratulating Reddit on its stock market debut."Big congrats @alexisohanian @redditspez on building something people want," Tan wrote, sharing a link to Reddit's profile on Y Combinator — the startup was a member of the accelerator's inaugural class — and an old photo of the two.<div type="image" title="Screenshot of Garry Tan tweet about Reddit IPO" height="541" width="588" msid="108688917" hostid="261" sizebytes="19254"></div>Ohanian responded to Tan's post, linking the post from Initialized Capital."Thanks Garry!" he wrote. "any idea what happened here?"Ohanian, Tan, and representatives for Initialized Capital did not immediately respond to requests for comment.

Reddit's co-founder is bickering with investors on the company's big IPO day

<ul class="summary-list"></ul>Halfway to the weekend! Here's a video of Mark Zuckerberg <a style="text-decoration: underline;" href="https://www.businessinsider.com/mark-zuckerberg-spars-mma-fighters-floating-barge-video-2023-9">sparring with MMA fighters</a> on a floating barge, proving that reality is always better than fiction. Speaking of fighting, the IPO market has been KO'd since 2022. But that could change with one company's <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/arm-ipo-softbank-apple-nvidia-google-stock-market-debut-chips-2023-9">upcoming public debut</a>. More in today's big story. What's on deck: <ul><li>Markets: Bad news for <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/commodities/oil-prices-russia-saudi-arabia-production-cuts-opec-supply-demand-2023-9">your gas tank</a>.</li><li>Tech: Getting <a style="text-decoration: underline;" href="https://www.businessinsider.com/apple-iphone-15-will-require-usb-c-charger-lightning-2023-9">Apple's new iPhone</a> means new chargers.</li><li>Business: What's fueling the <a style="text-decoration: underline;" href="https://www.businessinsider.com/loneliness-epidemic-decline-in-third-places-friends-parks-community-2023-9">loneliness epidemic</a>.</li></ul>But first, an initial important public offering.If this was forwarded to you, <a href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><a href="https://www.businessinsider.com/subscription/newsletter/insider-today"></a><a href="https://markets.businessinsider.com/news/stocks/arm-ipo-softbank-apple-nvidia-google-stock-market-debut-chips-2023-9" target="_blank" rel="noopener"></a><div type="image" title="arm ipo semiconductor chipmaker" height="768" width="1024" msid="103438907" hostid="261" sizebytes="33312"></div>The big storyA company's upcoming IPO will likely be the biggest US stock debut of the year and a bellwether for the fate of the wider market.But no pressure, Arm!The Softbank Group-owned chip designer filed paperwork Tuesday <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/arm-ipo-softbank-apple-nvidia-google-stock-market-debut-chips-2023-9">with plans to go public</a>, writes Insider's Phil Rosen. To put it simply, it's a big one.The British company, which designs chips used in most smartphones, is looking to raise up to $4.87 billion with a valuation as high as $52 billion. Even if it slightly misses those numbers, it'll still be the largest public debut in the US since <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/rivian-stock-price-ipo-debut-valuation-100-billion-ford-gm-2021-11">Rivian's IPO</a> in late 2021.But this isn't your run-of-the-mill large IPO. The market for companies going public has been all but dead since 2022. The lack of public offerings since March of last year is the worst IPO drought since 2009, according to Bloomberg data.However, the crux of the issue with IPOs dates back well before 2022. As is often the case, things took a turn at the onset of the pandemic. When the market collapsed in March 2020, plans to go public were put on hold. The stock market recovered in record time, but then something else held up IPOs: VC money. Rich with cash, venture investors were happy to keep pouring money into startups. The public markets suddenly didn't seem appealing when a startup could wait six months for its valuation to double from another round of funding. That formula suited startups well until 2022, when cracks started to show in the market. Cash wasn't cheap anymore — thanks a lot, Fed! — which meant no more eye-popping funding rounds. Meanwhile, IPOs weren't an option since public investors wouldn't support the puffed-up valuations startups were clinging to.Which brings us to Arm's IPO. A successful public debut, especially such a large one, would open up the floodgates for other companies on the fence about an IPO. Cleaning out the backlog of companies waiting to go public over the past three-plus years would also have some significant knock-on effects. More IPOs mean VCs get to cash out those early-stage investments. That means more cash for future investments, something the startup community desperately needs, save for those in AI. Of course, there are no guarantees. Should Arm's IPO fall flat, it could spell disaster. Arm has indicated interest in its IPO from the likes of Google, Apple, and Nvidia.But if a company in a buzzy sector with big-name backers can't crack the IPO drought, who can?<a href="https://markets.businessinsider.com/news/stocks/arm-ipo-softbank-apple-nvidia-google-stock-market-debut-chips-2023-9">Read the full story here.</a>3 things in markets Before the opening bell: US stock futures fall <a style="text-decoration: underline;" href="https://markets.businessinsider.com/premarket" target="_blank" rel="noopener">early Wednesday</a> as investors await the release of more economic data <a href="https://markets.businessinsider.com/news/commodities/oil-prices-russia-saudi-arabia-production-cuts-opec-supply-demand-2023-9" target="_blank" rel="noopener"></a><div type="image" title="oil rig" height="540" width="810" msid="103438909" hostid="261" sizebytes="64786"></div>1. Oil prices just surged thanks to Russia and Saudi Arabia extending production cuts. Brent crude surpassed $90 a barrel for the first time since November. The production cut, which will last until December, <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/commodities/oil-prices-russia-saudi-arabia-production-cuts-opec-supply-demand-2023-9">surprised industry experts</a>.2. Private equity is finally opening up to the public cloud. From improving dealmaking capabilities to boosting their portfolio companies, <a style="text-decoration: underline;" href="https://www.businessinsider.com/private-equity-apollo-eqt-approach-public-cloud-generative-ai-2023-9" target="_blank" rel="noopener">here's how companies like Apollo and EQT</a> are using the public cloud. 3. China can't catch a break. More bad news for the country that is struggling to revive its economy and is battling a property crisis. Bloomberg Economics predicts <a style="text-decoration: underline;" href="https://www.businessinsider.com/china-worlds-largest-economy-slowdown-growth-property-crisis-bloomberg-economics-2023-9">China's GDP</a> will only briefly surpass the US's in the mid-2040s before "falling back behind." The economists had previously believed China could overtake the US in the 2030s.3 things in tech<a href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-tech-sector-dominance-sp500-apple-microsoft-amazon-2023-9"></a><div type="image" title="Workers at big tech companies like Apple (left), Amazon, and Meta may be leaving after two years because of workplace dissatisfaction. " height="1500" width="3000" msid="103438911" hostid="261" sizebytes="317260"></div>1. RIP to Apple's lightning cable. The iPhone maker is set to change its charging cable for the first time in more than a decade. The iPhone 15 — set to come out this month — will reportedly <a style="text-decoration: underline;" href="https://www.businessinsider.com/apple-iphone-15-will-require-usb-c-charger-lightning-2023-9">use the new cord</a>.2. Why tech is positioned to dominate the stock market. Tech has already led the stock market for about a decade — starting when Apple became the biggest company in the world. But tech like AI is going to <a style="text-decoration: underline;" href="https://markets.businessinsider.com/news/stocks/stock-market-outlook-tech-sector-dominance-sp500-apple-microsoft-amazon-2023-9">solidify the industry's dominance</a> even more.3. Cofounder of Google's AI division says everyone will soon have their own AI-powered "chief of staff." Mustafa Suleyman predicted that within the next five years, everyone will have access to <a style="text-decoration: underline;" href="https://www.businessinsider.com/google-deepmind-cofounder-mustafa-suleyman-everyone-will-have-ai-assistant-2023-9">an AI assistant</a>. It'll be super smart and even understand your personal history.3 things in business<a href="https://www.businessinsider.com/loneliness-epidemic-decline-in-third-places-friends-parks-community-2023-9"></a><div type="image" title="Amid a midnight blue background, bright red and orange lonely faces wander among shuttered buildings and structures" height="1200" width="2400" msid="103438912" hostid="261" sizebytes="604852"></div>1. Loneliness is a design flaw. The amount of third places — social spaces we regularly visit that aren't our home or work — is on the decline. This is a catastrophe for our communities and for us, Insider's Eliza Relman<a style="text-decoration: underline;" href="https://dev.insider.com/author/eliza-relman" target="_blank" rel="noopener"></a> writes. It's so bad that the US Surgeon General Vivek Murthy calls this <a style="text-decoration: underline;" href="https://www.businessinsider.com/loneliness-epidemic-decline-in-third-places-friends-parks-community-2023-9">an epidemic of loneliness</a>.2. Inside the secretive world of superyachts. The rich are buying superyachts in record numbers. They're the ultimate symbol of wealth and allow the rich to relax — <a style="text-decoration: underline;" href="https://www.businessinsider.com/inside-the-secretive-world-of-superyachts-2023-8">and broker deals</a> — without so many prying eyes. Their staff onboard even have to sign comprehensive non-disclosure agreements.3. NYC is having an Airbnb reckoning. A new short-term rental law is going into effect this week. It impacts around 40,000 listings and includes restrictions like a reservation cap of two people and <a style="text-decoration: underline;" href="https://www.businessinsider.com/nyc-airbnb-crackdown-squeezes-hosts-and-renters-starting-september-5-2023-9">banning entire-unit rentals</a>.In other news<a href="https://www.businessinsider.com/how-more-than-quadrupled-salary-career-pivoting-2023-9" target="_blank" rel="noopener"></a><div type="image" title="headshot of Christian Lovell outside" height="3126" width="4160" msid="103438913" hostid="261" sizebytes="299022"></div><ul><li>United Airlines is back in the air after a <a style="text-decoration: underline;" href="https://www.businessinsider.com/united-airlines-ground-stop-nationwide-flights-2023-9">nationwide ground stop</a>.</li><li>China is reportedly planning a <a style="text-decoration: underline;" href="https://www.businessinsider.com/china-planning-41-billion-semiconductor-fund-chip-war-heats-up-2023-9">$41 billion boost</a> to its semiconductor industry.</li><li>Mercedes claims <a style="text-decoration: underline;" href="https://www.businessinsider.com/mercedes-says-new-sedan-beats-any-tesla-on-mileage-range-2023-9">its new EV</a> can beat any Tesla's driving range on a single charge.</li><li>From student loans to Social Security benefits, <a style="text-decoration: underline;" href="https://www.businessinsider.com/social-security-benefits-student-loan-repayment-congress-funding-budget-fight-2023-8">here's what's at stake</a> during the budget showdown.</li><li>This 30-year-old career strategist revealed how she <a style="text-decoration: underline;" href="https://www.businessinsider.com/how-more-than-quadrupled-salary-career-pivoting-2023-9">quadrupled her income</a>.</li><li>These are the 17 most affordable US cities, <a style="text-decoration: underline;" href="https://www.businessinsider.com/top-us-cities-real-estate-investing-rent-and-price-increases-2023-9">including Nashville and Las Vegas</a>.</li><li>Brands are <a style="text-decoration: underline;" href="https://www.businessinsider.com/brands-making-film-tv-demand-more-audience-data-sharing-streamers-2023-9">pouring money</a> into film and TV content.</li></ul>What's happening today<ul><li>Fit for a Queen: Freddie Mercury's personal belongings are up for auction. Around 1,500 items from his London home are up for sale — they've been untouched for 30 years. They include jewelry, stage-worn outfits, a grand piano, and manuscripts.</li><li>He's the one — Lil Wayne is honored at the BMI R&amp;B/Hip Hop Awards. The event celebrates 50 years of hip hop. And Lil Wayne will receive the BMI icon award — the organization's highest honor.</li><li>Earnings today: American Eagle, Dave &amp; Buster's, <a style="text-decoration: underline;" href="https://markets.businessinsider.com/earnings-calendar">and other companies</a>.</li></ul><div type="image" title="Elaine LaLanne" height="683" width="1024" msid="103438914" hostid="261" sizebytes="70876"></div>For your bookmarksElaine LaLanne and her husband shaped the healthy-living movement. She's worked out for decades and revealed her <a style="text-decoration: underline;" href="https://www.insider.com/elaine-lalanne-97-does-these-exercises-every-day-2023-9" target="_blank" rel="noopener">daily 20-minute routine</a>.The Insider Today team: <a href="https://www.businessinsider.com/author/dan-defrancesco">Dan DeFrancesco</a>, senior editor and anchor, in New York City. <a href="https://www.businessinsider.com/author/diamond-naga-siu">Diamond Naga Siu</a>, senior reporter, in San Diego. <a href="https://www.businessinsider.com/author/hallam-bullock">Hallam Bullock</a>, editor, in London. <a href="https://www.businessinsider.com/author/lisa-ryan">Lisa Ryan</a>, executive editor, in New York.

Insider Today: IPOs' make-or-break moment

<ul class="summary-list"><li>Allbirds was one of the last startups to go public in 2021's IPO biltz.</li><li>Since then, investors have raised the bar for money-losing companies seeking to list.</li></ul>Blink and you might have missed it, but the window for privately held companies to <a target="_blank" href="https://www.businessinsider.com/instacart-klaviyo-profitable-lead-tech-ipo-revival-2023-8">go public briefly reopened this year</a> after a nearly two-year hiatus. In September, Instacart, Arm, and Klaviyo went out in quick succession, and other candidates like <a target="_blank" href="https://www.businessinsider.com/what-is-shein-billion-dollar-fast-fashion-company-explained-2023-7#shein-has-filed-to-go-public-aiming-for-a-90-billion-valuation-16">Chinese fast-fashion giant Shein</a>, Skims, and Reddit have readied their papers in order to follow suit.The companies that floated initial public offerings this year had something in common: They're actually profitable.Going public before turning profitable is a thing of the past, according to Allbirds cofounder and chief innovation officer Tim Brown. "You need to be a great company, you need to be profitable," he told Business Insider.But that wasn't the case when <a target="_blank" href="https://www.businessinsider.com/what-happened-to-allbirds-rise-fall-2023-4">Allbirds</a> listed.<div type="image" title="Allbirds" height="900" width="1200" msid="105626953" hostid="261" sizebytes="67480"></div><h2>No profits, no problem</h2>Allbirds was once the <a target="_blank" href="https://www.insider.com/venture-capitalists-love-allbirds-2016-8">It shoe of Silicon Valley</a>, adorning the feet of engineers, venture capitalists, and heads of government. Time Magazine dubbed its hero product — the merino wool sneakers — "the world's most comfortable shoes." The company raised heaps of capital from investors including Maveron, <a target="_blank" href="https://www.businessinsider.com/tiger-global-hedge-fund-cut-back-fundraising-2023-7">Tiger Global</a>, and Lerer Hippeau. It filed confidentially to <a target="_blank" href="https://www.businessinsider.com/allbirds-ipo-filing-s1-analysis-2021-8">go public in the summer of 2021</a>.Through the pandemic, a dizzying number of startups took advantage of the ripe conditions for <a target="_blank" href="https://www.businessinsider.com/2021-shaping-up-be-record-year-for-ipos-here-are-the-biggest">going public</a>: high valuations, low interest rates, and roaring investor demand for new stocks. There were <a target="_blank" href="https://www.pwc.com/gx/en/audit-services/ipo-centre/assets/pwc-global-ipo-watch-2021.pdf">1,115 IPOs in the Americas in 2021</a>, according to PwC — by far the most for any year in this century.Few of these companies were actually making money. In a low-rate environment, investors have a higher tolerance for companies burning lots of cash in order to grow quickly. Firms like <a target="_blank" href="https://www.businessinsider.com/caspers-losses-valuation-and-tech-pretentions-could-hurt-its-ipo-2020-1">Casper</a>, Rent the Runway, and Peloton showed mounting losses in their S-1 filings.Allbirds was part of this generation of money-losing companies to go public. Its prospectus to would-be investors highlighted continuing losses even as revenue increased. The direct-to-consumer brand's net loss grew from $14.5 million in 2019 to $25.9 million in 2020. For the first six months of 2021, the company's losses totaled $21.1 million.<div type="image" title="Allbirds on Thursday announced a disappointing earnings report." height="4160" width="5547" msid="105626954" hostid="261" sizebytes="509394"></div>On its opening day of trading, shares of Allbirds surged 90%, closing at $28.64 apiece, but the jubilee and Champagne didn't last. In a matter of months, companies that sell directly to consumers started to fall out of favor with investors, who were paying closer attention to profits. Allbirds' shares tumbled. Its stock has lost 96% of its value since its public market debut and is recently trading at under $1.Like other retail brands, Allbirds is also battling rising <a target="_blank" href="https://www.businessinsider.com/freight-recession-economy-pandemic-trucking-transportation-consumer-demand-2023-9">freight costs</a> and <a target="_blank" href="https://www.businessinsider.com/jpmorgan-jamie-dimon-russia-ukraine-geopolitics-economy-rates-energy-prices-2023-9">impacts from the war in Ukraine</a>. The company had tried to do <a target="_blank" href="https://www.businessinsider.com/allbirds-weird-moonshot-carbon-neutral-sock-shoe-2023-6">more and more items</a>, from wool leggings to puffer jackets, Brown said. In doing so, it neglected the original customers who fell for its walk-on-air sneakers. Customers moved on to newer, hotter kicks.<div type="image" title="Allbirds M0.0nshot carbon neutral shoes" height="1875" width="2500" msid="105626958" hostid="261" sizebytes="381280"></div>Speaking to Insider about <a target="_blank" href="https://www.businessinsider.com/what-happened-to-allbirds-rise-fall-2023-4">the company's ongoing plan to streamline its business</a>, Brown said Allbirds focused on growth "through seven really wild years.""The path to profitability was something that we always knew was super important and then we hit some challenges," Brown said. "And the public markets have judged us poorly and not just us, a lot of that IPO class."And judge it has. Crunchbase News' Joanna Glasner reported in October that a selected group of the largest startup offerings of 2021, which includes Coinbase, Didi, Rivian, and Roblox, <a target="_blank" href="https://news.crunchbase.com/public/biggest-ipos-2021-current-value-didi-rivn/">have shed 60% of their value</a>.Last week, Allbirds reported another quarter of <a target="_blank" href="https://ir.allbirds.com/news-releases/news-release-details/allbirds-reports-third-quarter-2023-financial-results">bruising earnings</a>. Sales dropped by 21% year-over-year in the third quarter as the company discounts items and discontinues others. Shares have lifted slightly, however, after Allbirds began selling its shoes on Amazon earlier this month.Brown said if he could do it all again, he might have done a few things differently. The company recently relaunched a 2.0 version of the wool sneaker that made it famous."People love a comeback and I think they love what we stand for," said Brown, who stepped down as co-chief executive officer of Allbirds in May. "And now we just have to go execute really well."

The cofounder of Allbirds has some advice for startups looking to IPO: make money ahead of going public

<ul class="summary-list"><li>Instacart shares recently fell below its $30 IPO price.</li><li>Finance professor Aswath Damodaran posted a harsh analysis of the company's core business. </li></ul>To have a healthy digital advertising business, you actually have to have something else substantial sitting behind it, luring customers to visit your site and hopefully spend money.This is one of the concerns that has turned <a target="_blank" href="https://www.businessinsider.com/instacart-founder-apoorva-mehta-ipo-2023-9">Instacart's IPO</a> into a flop. The stock recently fell below the company's <a target="_blank" href="https://www.businessinsider.com/instacart-ipo-billions-sequoia-2023-9">original $30 per share</a> listing price.To be successful, an <a target="_blank" href="https://www.businessinsider.com/personal-finance/what-is-ipo">IPO</a> must deliver a big pop to the investors who signed on to buy stock when it debuts. Gains of 20% or more are pretty solid. Instacart has so far delivered its new shareholders nothing.The company is valued at just over $8 billion, down from $39 billion a few years ago during the pandemic. Several late-stage investors, including D1, Fidelity, DST Global and T. Rowe Price, are <a target="_blank" href="https://www.cnbc.com/2023/09/15/sequoia-andreessen-set-to-take-massive-hit-on-2021-instacart-investment.html">likely sitting on losses now</a>, according to estimates from Aswath Damodaran, a professor of finance at NYU's Stern School of Business.He came out with an <a target="_blank" href="https://aswathdamodaran.blogspot.com/2023/09/putting-instacart-before-grocery-horse.html?m=1&amp;s=09">analysis of Instacart's business</a> valuing the company at $29 a share.Instacart, and its relatively new CEO <a target="_blank" href="https://www.businessinsider.com/instacart-ceo-fidji-simos-stock-worth-13-million-valuation-2023-9">Fidji Simo</a>, built an <a target="_blank" href="https://www.businessinsider.com/instacart-advertising-business-revenue-ipo-amazon-seth-dallaire-2021-6">impressive advertising business</a> on top of the company's core grocery delivery operation. That addition has generated new revenue and even profits.But the future growth of Instacart will ultimately depend on how many customers it has and how much they spend. Without that, there's no one to advertise to. So Damodaran rightly focused his analysis mostly on the grocery delivery business.The main takeaway is that grocery delivery is a tough business. I pulled out some highlights from Damodaran's blog to illustrate this.Instacart declined to comment about its share price decline and Damodaran's analysis.<h2>Grocery is a low-margin business</h2>Instacart's take rate was 7.5% over the past 12 months. That's much lower than Airbnb and Doordash, Damodaran wrote. The reason: The grocery business is low-margin, so there's not a lot of room for Instacart to skim more fees."If you are an intermediary in a business with slim operating margins, as Instacart is, the low operating profitability of the grocery business will limit how much you can claim as a price for intermediation, in service fees," Damodaran wrote.<h2>Most people like to go to grocery stores</h2>For non-processed food, especially fresh meats and produce, being able to see and touch items before you buy them is part of the shopping experience. Online photos don't cut it. I personally like to feel the avocados before I buy them. And those endless product substitution messages from rushed Instacart Shoppers are infuriating.<h2>COVID hangover</h2>Instacart saw orders and revenue surge dramatically when everyone was stuck at home during COVID-19. Makes sense. But once the pandemic ebbed, a lot of consumers went back to their local grocery store (see the section above)."Caught up in the mood of the moment, it is easy to see why so many extrapolated Instacart's success in 2020 into the future, forecasting that the shift to online grocery shopping would be permanent, and that Instacart would dominate that business," Damodaran wrote.<h2>Growth is capped</h2>Some Instacart customers have stayed with the service, judging the convenience to be worth it over the downsides. However, the grocery industry is not a growth sector, unlike other parts of e-commerce."The ceiling on online grocery retail will remain much lower than the ceiling on online shopping in other areas in retail, with even optimists capping the share at 20%," Damodaran said. "In short, the growth in online grocery sales will be higher than total grocery sales growth, but not overwhelmingly so."<h2>Competition</h2>During the pandemic, grocers woke up and started offering online shopping services directly to their own customers, often preferring to have consumers pick-up their orders rather than deliver them. These offerings are pretty cost competitive because most grocery stores nixed the extra service fees and used existing employees as shoppers.Instacart is also starting to face competition from Uber Eats, DoorDash, and GrubHub."In short, Instacart will be lucky to hold on to its existing market share, even if it plays its cards right, leaving its growth at or below the growth in the overall online grocery shopping market," Damodaran wrote.<h2>Costs</h2>Instacart usually pays its Shoppers based on the number of orders they handle and how many deliveries they make. This is a major expense for the company and it is variable, rising and falling with revenue.That reduces risk, but it means Instacart can't benefit much from economies of scale. This is a core feature of most tech companies that investors love. As sales rise, expenses usually don't rise as much for a software company, which often means big profits over time. Instacart doesn't really have this, according to Damodaran.<h2>Growth has slowed</h2>Tech companies are expected to grow quickly. Instacart's core business isn't really doing that.The company handled 262.6 million orders in 2022 versus 263.20 million in the last 12 months. Gross transaction volume was $28.8 billion in 2022 versus $29.4 billion in the past 12 months, according to Damodaran's blog.

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