Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

Missing some action, adrenaline rush, and thrill in your life? Are the good old, albeit mundane money investment avenues like mutual funds and fixed deposits not making the cut for you? Want to experience a heart-pounding, financial rollercoaster that will constantly keep you and your portfolio on tenterhooks? Well then, welcome to the world of initial public offers (IPOs), especially those brought to you by SMEs, or <keyword id="6375845" type="General" weightage="20" keywordseo="Small-and-Medium-Enterprises" source="Orion">small and medium enterprises</keyword>. Truth be told, <keyword id="3704207" type="General" weightage="100" keywordseo="SME-IPOs" source="Orion">SME IPOs</keyword> have been all over the bourses this year. So far, 2024 has seen 206 SMEs debuting on both BSE and NSE, out of which 146 listed in gains and 46 listed in losses. Odds seem good, right? In contrast, the year has only seen 63 IPOs from the elder brother i.e. mainboard, only 48 of which managed to post any listing gains. And getting an allotment has also been a major uncertainty, given the unusually high demand this year. <h2>So, what's an SME <keyword id="6354763" type="General" weightage="20" keywordseo="IPO" source="Orion">IPO</keyword>, you ask?</h2>Think of a mainboard company as Shah Rukh or Salman Khan—well-established, financially stable, strong legacy of profitability, and fairly well-known. On the other hand, SMEs are your Prateek Gandhi (Harshad Mehta, Scam 1992), Siddhant Chaturvedi (MC Sher, Gully Boy) or Avinash Tiwary (Majnu, Laila Majnu). While they are doing super well, they are yet to make it big like the Khans. They’re currently underdogs, lesser known, but who knows? They can be the next big thing in the future! And SME IPOs are getting a stellar reception. In 2023, 182 such IPOs had raised a substantial Rs 4,967 crore. In 2024, more than 200 companies have already raised over Rs 7,500 crore, and we have four months to go. This, with one quarter of the year still remaining. <div type="image" title="In 2024, India leads IPO activity in the Asia-Pacific region" height="900" width="1200" msid="113875643" hostid="261" caption="&amp;lt;p&amp;gt;In 2024, India leads IPO activity in the Asia-Pacific region&amp;lt;/p&amp;gt;"></div> But what does it take for a company to be classified as a small enterprise? The company has to have an annual turnover/income of up to Rs 50 crore, and for a medium enterprise to be called so, its annual income has to be up to Rs 250 crore. When such companies go public, in a bid to raise funds from investors and expand their operations, they launch an IPO, but not on the main exchange, but separately, on NSE’s Emerge and BSE’s SME platform. As of September 2024, <keyword id="4484133" type="General" weightage="20" keywordseo="NSE-Emerge" source="Orion">NSE Emerge</keyword> has 147 listed participants, while <keyword id="1885131" type="General" weightage="20" keywordseo="BSE-SME" source="Orion">BSE SME</keyword> has 155 market makers. Mounting an SME’s IPO is comparatively less stringent than their mainboard counterparts, as far as regulations are concerned since their DRHPs (draft <keyword id="12225712" type="General" weightage="20" keywordseo="Red-herring-prospectus" source="Orion">red herring prospectus</keyword>) are not filed with SEBI. So, wouldn’t a lenient treatment make them inherently riskier? Why are they so appealing, you ask? <a href="https://www.businessinsider.in/stock-market/news/a-company-with-8-employees-looking-to-raise-12-crore-ended-up-getting-applications-worth-over-4700-crore/articleshow/112824522.cms">Delhi firm with just 8 employees seeks ₹12 crore via IPO, gets ₹4,700 crore worth of investor applications!</a> Well, for one, some of them have delivered exceptional returns—we’re talking 100%, 200%. Consider this—Owais Metal and Mineral Processing, which launched its IPO in February this year, delivered a whopping listing gain of 201%. Another SME, Maxposure, whose IPO was out in January 2024, had earned its investors listing gains worth 317.40%! Apparently, higher risks also mean higher returns, and also super high investment. Most SME IPOs need a minimum investment of Rs 1,00,000 or more, as opposed to mainboard IPOs, where you can buy one lot of shares for anywhere between Rs 14,000-15,000. Even the minimum trading lot size for SME shares is about 10,000. In short, you’d have to potentially empty your pockets to invest in an SME IPO. And still, there’s no guarantee that the listing will fill your wallets. For all you know, your pockets before and after the IPO is listed might stay the same - EMPTY! There's also the question of whether or not these SMEs are able to maintain their listing day mojo, or do they just fizzle out thereafter? Data from Prime Database highlights more instances of the latter. As of August 2024, about 166 SME IPOs had made it to the exchanges. Around 72 of them, or close to 50%, could not sustain their momentum going ahead, and were trading below their listing day prices. Consider this. The post listing gains of Medicamen Organics, whose IPO came out in June 2024, earned its investors massive listing gains of over 300%, by listing at Rs 137.85, significantly higher than its price issue price, which was set between Rs 32-34. But as of October 1, 2024, the stock was trading at Rs 64.2. Talk about falls. Additionally, risks of pump-and-dump, and illiquidity, among others makes SME IPOs dangerous See, you're largely venturing into unknown, pitch-dark territories, without much light to guide you. For starters, SME IPOs face less scrutiny from market watchdog SEBI. This also means they are able to list quickly, just 3-4 months. On the other hand, mainboard IPOs can take upto a year before they are cleared for listing. Also, there is far less information and disclosures available about their financials, fundamentals and performance to investors for making an informed decision, as compared to mainboard stocks. Then there’s the issue of illiquidity. Once purchased, you might find it hard to sell off your SME stocks, since they are not traded as frequently in the market, which means lower liquidity. Trivesh D, COO, Tradejini explains that liquidity is a major concern for such stocks. “These stocks typically have a smaller free float, and are traded in lots, which can lead to volatility and sharp price swings. This means it can be challenging for investors to buy or sell shares without significantly impacting prices. Additionally, speculative trading practices, like 'pump-and-dump' schemes, can inflate stock prices, leaving retail investors vulnerable to sudden drops”. Recently, SME IPOs have gained notoriety for price manipulation via showing fictitious sales and revenue in their books of accounts, selling of promoter holdings at inflated prices, and being the facade for many infamous <keyword id="10663340" type="General" weightage="20" keywordseo="Pump-and-Dump" source="Orion">pump and dump</keyword> schemes. This is where select people create frenzy, or mass euphoria over a particular stock or company, causing its prices to soar, and then dumping them, or selling their shares at this massive price to make a killing! Infact, it's not just the promoters, but also the investment banks floating these IPOs. At present, SEBI is investigating around 6 investment banks which have allegedly charged SMEs a staggering 15% of funds raised via IPOs as fee, as opposed to the standard 1-3%. In March 2024, SEBI chairperson Madhabi Puri Buch had also highlighted witnessing signs of manipulation in the SME space. “We do see signs of manipulation in the SME segment. We are able to see certain patterns.” Buch had observed back then. Adds Kresha Gupta, Founder &amp; Director, StepTrade Share Services, “Investing in SME IPO comes with significant risks, despite their impressive returns in recent years. Limited participation from institutional investors and public in some SME IPOs also mean that those companies may lack the support and stability that comes with larger-scale investments” “Additionally, many SMEs may not have strong fundamentals to justify their valuations. High P/E ratios can be misleading, and while some IPOs have delivered impressive returns, they often come with significant volatility, continues D of Tradejini. <h2>So, should I stay away? </h2>Yes, and No. Yes, if you don't want to do your homework of researching the company thoroughly beforehand. Anand K. Rathi, Co-Founder of MIRA Money suggests asking a couple of questions before investing your hard earned money: <ul><li>What is the company's financial performance over the past 3-4 years?</li><li>What is the company's governance structure?</li><li>Is the financial success driven by the IPO, or is it a result of consistent performance?</li><li>Does the company have what it takes to scale its operations to the next level?</li><li>Are the company’s promoters trustworthy, capable and experienced?</li><li>What is the level of participation by large, institutional investors?</li></ul> But staying away completely? Not necessary. Gupta adds that retail investors, in particular, should avoid viewing SME IPOs as quick money-makers based on their short-term performance, as this can certainly lead to poor investment decisions. “To mitigate risks, investors should always focus on long-term fundamentals rather than just short-term price movements. Key indicators include the participation of institutional investors like DIIs and FIIs. This often signals confidence in the stock”, she continues. A red flag you should look out for is if a company is only offering OFS, or Offer for Sale. This can indicate early investors looking to exit, potentially signaling weaker future growth. That's why it is better to look for companies which are raising capital for expansion purposes. This is a sign of healthy business growth prospects and improving fundamentals. In conclusion, backing the underdog, or SMEs, is not a bad proposition, but not without its risks. Investing in SME IPOs is like riding a unicorn—but you don't know whether you're riding it to rags or riches! So, take your pick.

Why investing in SME IPOs should not be on top of your adventure to-do list!

<div type="image" title="In 2024, India has seen around $12.2 billion worth of IPOs, including mainboard and SMEs" msid="113878163" hostid="261" sizebytes="45300" caption="&amp;lt;p&amp;gt;In 2024, India has seen around $12.2 billion worth of IPOs, including mainboard and SMEs&amp;lt;/p&amp;gt;"></div> Missing some action, adrenaline rush, and thrill in your life? Are the good old, albeit mundane money investment avenues like mutual funds and fixed deposits not making the cut for you? Want to experience a heart-pounding, financial rollercoaster that will constantly keep you and your portfolio on tenterhooks? Well then, welcome to the world of initial public offers (IPOs), especially those brought to you by SMEs, or <keyword id="6375845" type="General" weightage="20" keywordseo="Small-and-Medium-Enterprises" source="Orion">small and medium enterprises</keyword>. Truth be told, <keyword id="19938687" type="General" weightage="20" keywordseo="sme" source="keywords">SME</keyword> IPOs have been all over the bourses this year. So far, 2024 has seen 206 SMEs debuting on both BSE and NSE, out of which 146 listed in gains and 46 listed in losses. Odds seem good, right? In contrast, the year has only seen 63 IPOs from the elder brother i.e. mainboard, only 48 of which managed to post any listing gains. And getting an allotment has also been a major uncertainty, given the unusually high demand this year. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">So, what's an <keyword id="5559702" type="General" weightage="100" keywordseo="SME-IPO" source="Orion">SME IPO</keyword>, you ask?</h2>Think of a mainboard company as Shah Rukh or Salman Khan—well-established, financially stable, strong legacy of profitability, and fairly well-known. On the other hand, SMEs are your Prateek Gandhi (Harshad Mehta, Scam 1992), Siddhant Chaturvedi (MC Sher, Gully Boy) or Avinash Tiwary (Majnu, Laila Majnu). While they are doing super well, they are yet to make it big like the Khans. They’re currently underdogs, lesser known, but who knows? They can be the next big thing in the future! And SME IPOs are getting a stellar reception. In 2023, 182 such IPOs had raised a substantial Rs 4,967 crore. In 2024, more than 200 companies have already raised over Rs 7,500 crore, and we have four months to go. This, with one quarter of the year still remaining. <div type="image" title="In 2024, India leads IPO activity in the Asia-Pacific region" height="900" width="1200" msid="113875643" hostid="261" caption="&amp;lt;p&amp;gt;In 2024, India leads IPO activity in the Asia-Pacific region&amp;lt;/p&amp;gt;"></div> But what does it take for a company to be classified as a small enterprise? The company has to have an annual turnover/income of up to Rs 50 crore, and for a medium enterprise to be called so, its annual income has to be up to Rs 250 crore. When such companies go public, in a bid to raise funds from investors and expand their operations, they launch an <keyword id="19898327" type="General" weightage="20" keywordseo="ipo" source="keywords">IPO</keyword>, but not on the main exchange, but separately, on NSE’s Emerge and BSE’s SME platform. As of September 2024, <keyword id="4484133" type="General" weightage="20" keywordseo="NSE-Emerge" source="Orion">NSE Emerge</keyword> has 147 listed participants, while <keyword id="1885131" type="General" weightage="20" keywordseo="BSE-SME" source="Orion">BSE SME</keyword> has 155 market makers. Mounting an SME’s IPO is comparatively less stringent than their mainboard counterparts, as far as regulations are concerned since their DRHPs (draft red herring prospectus) are not filed with SEBI. So, wouldn’t a lenient treatment make them inherently riskier? Why are they so appealing, you ask? <a href="https://www.businessinsider.in/stock-market/news/a-company-with-8-employees-looking-to-raise-12-crore-ended-up-getting-applications-worth-over-4700-crore/articleshow/112824522.cms">Delhi firm with just 8 employees seeks ₹12 crore via IPO, gets ₹4,700 crore worth of investor applications!</a> Well, for one, some of them have delivered exceptional returns—we’re talking 100%, 200%. Consider this—Owais Metal and Mineral Processing, which launched its IPO in February this year, delivered a whopping listing gain of 201%. Another SME, Maxposure, whose IPO was out in January 2024, had earned its investors listing gains worth 317.40%! Apparently, higher risks also mean higher returns, and also super high investment. Most SME IPOs need a minimum investment of Rs 1,00,000 or more, as opposed to mainboard IPOs, where you can buy one lot of shares for anywhere between Rs 14,000-15,000. Even the minimum trading lot size for SME shares is about 10,000. In short, you’d have to potentially empty your pockets to invest in an SME IPO. And still, there’s no guarantee that the listing will fill your wallets. For all you know, your pockets before and after the IPO is listed might stay the same - EMPTY! There's also the question of whether or not these SMEs are able to maintain their listing day mojo, or do they just fizzle out thereafter? Data from Prime Database highlights more instances of the latter. As of August 2024, about 166 SME IPOs had made it to the exchanges. Around 72 of them, or close to 50%, could not sustain their momentum going ahead, and were trading below their listing day prices. Consider this. The post listing gains of Medicamen Organics, whose IPO came out in June 2024, earned its investors massive listing gains of over 300%, by listing at Rs 137.85, significantly higher than its price issue price, which was set between Rs 32-34. But as of October 1, 2024, the stock was trading at Rs 64.2. Talk about falls. Additionally, risks of pump-and-dump, and illiquidity, among others makes SME IPOs dangerous See, you're largely venturing into unknown, pitch-dark territories, without much light to guide you. For starters, SME IPOs face less scrutiny from market watchdog SEBI. This also means they are able to list quickly, just 3-4 months. On the other hand, mainboard IPOs can take upto a year before they are cleared for listing. Also, there is far less information and disclosures available about their financials, fundamentals and performance to investors for making an informed decision, as compared to mainboard stocks. Then there’s the issue of illiquidity. Once purchased, you might find it hard to sell off your SME stocks, since they are not traded as frequently in the market, which means lower liquidity. Trivesh D, COO, Tradejini explains that liquidity is a major concern for such stocks. “These stocks typically have a smaller free float, and are traded in lots, which can lead to volatility and sharp price swings. This means it can be challenging for investors to buy or sell shares without significantly impacting prices. Additionally, speculative trading practices, like 'pump-and-dump' schemes, can inflate stock prices, leaving retail investors vulnerable to sudden drops”. Recently, SME IPOs have gained notoriety for price manipulation via showing fictitious sales and revenue in their books of accounts, selling of promoter holdings at inflated prices, and being the facade for many infamous pump and dump schemes. This is where select people create frenzy, or mass euphoria over a particular stock or company, causing its prices to soar, and then dumping them, or selling their shares at this massive price to make a killing! Infact, it's not just the promoters, but also the investment banks floating these IPOs. At present, SEBI is investigating around 6 investment banks which have allegedly charged SMEs a staggering 15% of funds raised via IPOs as fee, as opposed to the standard 1-3%. In March 2024, SEBI chairperson Madhabi Puri Buch had also highlighted witnessing signs of manipulation in the SME space. “We do see signs of manipulation in the SME segment. We are able to see certain patterns.” Buch had observed back then. Adds Kresha Gupta, Founder &amp; Director, StepTrade Share Services, “Investing in SME IPO comes with significant risks, despite their impressive returns in recent years. Limited participation from institutional investors and public in some SME IPOs also mean that those companies may lack the support and stability that comes with larger-scale investments” “Additionally, many SMEs may not have strong fundamentals to justify their valuations. High P/E ratios can be misleading, and while some IPOs have delivered impressive returns, they often come with significant volatility, continues D of Tradejini. <h2 style="box-sizing: border-box; border: 0px; outline: 0px; padding: 0px; margin: 0px 0px 0.7em; font-family: &quot;Open Sans&quot;, sans-serif; font-weight: 700; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; list-style: none; background: 0px 0px; text-rendering: optimizelegibility; text-transform: none; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;">So, should I stay away?</h2>Yes, and No. Yes, if you don't want to do your homework of researching the company thoroughly beforehand. Anand K. Rathi, Co-Founder of MIRA Money suggests asking a couple of questions before investing your hard earned money: <ul><li>What is the company's financial performance over the past 3-4 years?</li><li>What is the company's governance structure?</li><li>Is the financial success driven by the IPO, or is it a result of consistent performance?</li><li>Does the company have what it takes to scale its operations to the next level?</li><li>Are the company’s promoters trustworthy, capable and experienced?</li><li>What is the level of participation by large, institutional investors?</li></ul> But staying away completely? Not necessary. Gupta adds that retail investors, in particular, should avoid viewing SME IPOs as quick money-makers based on their short-term performance, as this can certainly lead to poor investment decisions. “To mitigate risks, investors should always focus on long-term fundamentals rather than just short-term price movements. Key indicators include the participation of institutional investors like DIIs and FIIs. This often signals confidence in the stock”, she continues. A red flag you should look out for is if a company is only offering OFS, or Offer for Sale. This can indicate early investors looking to exit, potentially signaling weaker future growth. That's why it is better to look for companies which are raising capital for expansion purposes. This is a sign of healthy business growth prospects and improving fundamentals. In conclusion, backing the underdog, or SMEs, is not a bad proposition, but not without its risks. Investing in SME IPOs is like riding a unicorn—but you don't know whether you're riding it to rags or riches! So, take your pick.

SIMPLY PUT: Why investing in SME IPOs should not be on top of your adventure to-do list!

<ul class="summary-list"><li>The healthcare market looks nearly ready for the next wave of IPOs.</li><li>Barclays' Jon Swope says IPO hopefuls should prepare by increasing the awareness of their companies.</li></ul>It's been a rough few years for healthcare initial public offerings. But the next wave of public healthcare companies looks to be on the horizon.At least two healthcare companies are considering public-market debuts in the not-so-distant future. The diabetes startup <a target="_blank" class="" href="https://www.businessinsider.com/exclusive-omada-health-confidentially-filed-s1-ipo-public-2024-10">Omada Health confidentially filed its S-1 this summer</a>. And the physical-therapy startup <a target="_blank" class="" href="https://www.businessinsider.com/hinge-health-s-1-morgan-stanley-ipo-2024-9">Hinge Health has hired banks including Barclays</a> as it prepares to file its S-1 confidentially.Hinge and Omada likely aren't the only healthcare companies <a target="_blank" class="" href="https://www.businessinsider.com/healthcare-startups-ipo-public-markets-reopens-2024-1">weighing an IPO as market conditions improve</a>.Jon Swope, a managing director in Barclays' healthtech division, told me he expects a pickup in healthcare IPOs in 2025 after a three-year drought.<div type="image" title="A headshot of Jon Swope." height="1200" width="846" msid="114356715" hostid="261" sizebytes="24914"></div>I spoke with him about what the next wave of healthcare IPOs could bring — and which healthcare startups are in the best position to test the public markets.The following has been edited for clarity and length.In the past few years there have been a number of take-privates and near-delistings in healthcare, as well as plenty of healthcare companies that have otherwise struggled in the public markets. What can we learn from those companies' challenges, and how might they impact the next round of healthcare IPOs?The whipsaw of the public markets over the last five years has created a challenging backdrop, even with the overall market improving.From 2019 through 2021, nearly 20 companies went public through IPOs or SPACs in healthtech. At its peak, the total market cap for healthtech and digital health was over $300 billion. Through both take-privates and declines in share prices, that's down to just about $90 billion.Large take-privates like Change Healthcare, Nuance, Cerner, Inovalon, and others are part of the story. The other part is that, on average, the companies that went public or were already public are down by about 80% — names like Teladoc, Accolade, and Health Catalyst.The enthusiasm that supported the last wave, with respect to the positive and innovative business models in healthtech and digital health, is not gone. It's just that these companies haven't been able to achieve growth with profitability. When there's a next set, there's going to be more of a focus on growth and profitability.You see that in the IPOs that happened this year: Waystar and Tempus. Waystar is large-scale, profitable, with growth, and Tempus has the promise of AI, high growth, and emerging profitability. Both have performed since their public debut.In the private sphere, many investors have leaned away from healthcare services and into healthcare AI. What models do you expect the healthcare market to favor in this next round of IPOs?There are three general categories that are investible in healthtech and digital healthcare. One is simply data and then technology and healthcare. Healthcare is arguably two decades behind every other industry in the adoption of technology. Whether it's software, tech-enabled models, or, importantly, the data opportunity and AI opportunity, tech and data infrastructure for healthcare is No. 1.No. 2 is consumer-centric models, such as some B2B2C models, the employer and payer digital-health models, or even direct-to-consumer models. Look at <a target="_blank" class="" href="https://www.businessinsider.com/inside-hims-founders-journey-to-go-public-via-spac-2021-1">the performance of Hims</a>, which has emerged from its post-SPAC purgatory.Consumer-centric healthcare is the future of healthcare, and it's becoming more of our collective reality. The companies with consumer-centric business models that deliver longitudinal engagement and outcomes, financial and clinical, for consumers and the payers of healthcare, both employers and insurance companies, are certainly on the list.No. 3 is value-based care. Much has been made of that as a category, tying together costs and outcomes. And while some of the brick-and-mortar value-based care companies have had their own challenges, support for the adoption of value-based care by providers will continue to be where healthcare is going.Are there models in healthcare that you think are perhaps not the best fit for the public markets right now?The less complex the elevator pitch, the better. While I can't say there's a model that's not a fit, what we heard from investors as things were bending in the wrong direction last boom cycle was: "Wait, what did I just buy? I'm not sure I fully understand this company's business model."Now you have to juxtapose that against the reality of healthcare, which is complex. So it's companies that can articulate a clear and simple story while also navigating the layers of the healthcare ecosystem in executing on their business model.That includes riding the existing rails. In the last five-plus years we've seen companies figuring out how to work with the payers and providers that make up the healthcare ecosystem to bring innovation and disruption to how we experience healthcare.Given the major slowdown in SPAC deals in the past few years and Nuvo's poor performance (<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-08-22/newly-public-pregnancy-care-firm-nuvo-files-for-bankruptcy">and bankruptcy</a>) this year, could we see more SPAC deals for healthcare startups next year?It's a four-letter word for the foreseeable future. I imagine there will be SPACs created, and there are still others that haven't run out of time, but it's unlikely that we see companies using that vehicle that could go public the regular way.For startups that don't go public, will we see M&amp;A pick up in 2025? With large retailers like Walmart pulling away from healthcare, who are the potential buyers?M&amp;A is picking up already, as evidenced by volume this year, and it will continue to, particularly in an easing financing environment and macro backdrop where bid-ask spreads are narrowing.The consolidation activity is in three categories. First, there are the large-cap consolidators including retailers, payers, and Big Tech. There will be deals there, but there are only so many that will be done by that group, which is not much more than a dozen companies.The next is large-cap, and often private-equity-backed, healthtech consolidators. A number of them are private and will continue to be buyers.The third category is just smaller mergers of equals. Especially for enterprise sales, selling into payers or selling to providers, scale matters, and so size matters. We'll see small companies merge with other small companies to get there.Anything else startups should know that might impact this next cycle of IPOs?While these companies that went public in the last cycle may not have fulfilled their promises, they set the stage for an attractive IPO market by going public the right way — executing on the business and growing it, and increasing awareness around the company well in advance of an IPO.At the back end of the last boom wave there was a rush to go public, and SPACs were examples of that. I think that in the 2025, 2026, and 2027 IPO classes, there will be a number of companies that think about it the right way, not rushing to get to the public market.

2025 could bring a wave of healthcare IPOs. Here's what startups should know, according to a top banker.

Dear reader, Another week comes to an end, and with it, a fresh roundup of stories shaping the business and finance landscapes. This week, we explored data that challenges the idea that large IPOs automatically lead to large returns—18 of India’s biggest IPOs fell short of expectations. On the investment front, experts debunked the popular advice of ‘<keyword id="23577643" type="General" weightage="20" keywordseo="buying-the-dip" source="keywords">buying the dip</keyword>’ and suggest a better approach for long-term success. And in the world of <keyword id="19963428" type="General" weightage="20" keywordseo="quick-commerce" source="keywords">quick commerce</keyword>, recent incidents like bizarre notifications and uncalled-for freebies piqued social media's interest. For stargazers and romantics, the upcoming <keyword id="22852367" type="General" weightage="20" keywordseo="Hunters-Moon" source="keywords">Hunter’s Moon</keyword> offers a beautiful setting for a moonlit night. And for career climbers, we have insights from a <keyword id="21560867" type="General" weightage="20" keywordseo="product-manager" source="keywords">product manager</keyword> who landed a $180,000 role at <keyword id="19904352" type="General" weightage="20" keywordseo="Cisco" source="keywords" meta.keywordsubtype="org" meta.entityname="Cisco" meta.hostid="261" meta.entityid="Cisco">Cisco</keyword>, sharing <keyword id="21767233" type="General" weightage="20" keywordseo="resume-tips" source="keywords">resume tips</keyword> to help you stand out. Dive in, and enjoy this week’s highlights! <h2>Top stories of the week</h2> Do large IPOs guarantee large returns? Data suggests that 18 of India's biggest 30 IPOs did not generate solid returns A study of India’s top 30 IPOs reveals that a majority—18 of them—failed to deliver substantial returns to investors. Despite the hype surrounding large public offerings, data shows that a company’s size or popularity doesn’t always correlate with strong post-IPO performance. Investors are urged to manage their expectations and conduct thorough research before jumping into large IPOs, as high-profile launches don’t guarantee hefty returns. <a href="https://www.businessinsider.in/finance/news/do-large-ipos-guarantee-large-returns-data-suggests-that-18-of-indias-biggest-30-ipos-did-not-generate-hefty-returns/articleshow/114302378.cms" data-type="tilCustomLink" target="_blank">Read more</a> Free tomatoes to i-pill notification, recent quick commerce incidents that sparked outrage Recent incidents in India’s quick commerce sector have sparked widespread outrage, ranging from offering free tomatoes as promotional giveaways to sending unsolicited I-Pill notifications to customers. These occurrences highlight issues around <keyword id="19999043" type="General" weightage="20" keywordseo="consumer-privacy" source="keywords">consumer privacy</keyword>, safety, and inappropriate marketing strategies. As rapid delivery services continue to expand, so do concerns about their ethical and operational practices. <a href="https://www.businessinsider.in/business/news/free-tomatoes-to-i-pill-notification-recent-quick-commerce-incidents-that-sparked-outrage/articleshow/114315992.cms" data-type="tilCustomLink" target="_blank">Read more</a> Why "buying the dip" is not always good advice, and the right time to start is now The age-old investment advice of ‘buying the dip’ may not always hold true, especially in unpredictable markets. Experts argue that waiting for stocks to drop before investing could result in missed opportunities, as market timings are nearly impossible to predict. Instead, the best strategy for long-term investors may be to focus on consistent investing, with the right time to start being now. <a href="https://www.businessinsider.in/stock-market/news/why-buying-the-dip-is-not-always-good-advice-the-right-time-to-start-is-now/articleshow/114253456.cms" data-type="tilCustomLink" target="_blank">Read more</a> Why this week's Hunter's Moon is the ultimate backdrop for the perfect moonlit date night The upcoming Hunter’s Moon, which will grace the skies this week, offers the perfect opportunity for a romantic, moonlit night. This full moon is not only visually stunning but also holds cultural significance, symbolizing harvest and abundance. For those seeking an atmospheric, nature-infused experience, this celestial event promises to be the ultimate backdrop for a memorable date night. <a href="https://www.businessinsider.in/science/space/article/why-this-weeks-hunters-moon-is-the-ultimate-backdrop-for-the-perfect-moonlit-date-night/articleshow/114317181.cms" data-type="tilCustomLink" target="_blank">Read more</a> A product manager shares the résumé that helped him transition from consulting and land a $180,000 role at Cisco Transitioning from consulting to a high-paying role as a product manager at Cisco, one professional shared the resume that helped him land the $180,000 job. His strategic approach included tailoring his CV to highlight relevant skills and experiences, positioning himself as the perfect candidate for the tech giant. Aspiring product managers can take notes on crafting resumes that stand out in competitive job markets. <a href="https://www.businessinsider.in/careers/news/a-product-manager-shares-the-rsum-that-helped-him-transition-from-consulting-and-land-a-180000-role-at-cisco/articleshow/114232654.cms" data-type="tilCustomLink" target="_blank">Read more</a> <h2><h2>Web Stories </h2> <a href="https://www.businessinsider.in/international/webstories/india-canada-tussle-a-timeline-of-escalating-tensions-under-trudeaus-regime/slidelist/114283096.cms" data-type="tilCustomLink" target="_blank">India-Canada Tussle: A timeline of escalating tensions under Trudeau’s regime</a><a href="https://www.businessinsider.in/international/webstories/india-canada-tussle-a-timeline-of-escalating-tensions-under-trudeaus-regime/slidelist/114283096.cms" data-type="tilCustomLink" target="_blank"></a> <a href="https://www.businessinsider.in/international/webstories/the-weirdest-guinness-world-records-ever-set/slidelist/114288059.cms" data-type="tilCustomLink" target="_blank">The weirdest Guinness World records ever set</a><a href="https://www.businessinsider.in/international/webstories/the-weirdest-guinness-world-records-ever-set/slidelist/114288059.cms" data-type="tilCustomLink" target="_blank"></a> <a href="https://www.businessinsider.in/travel/india/webstories/from-amber-to-gagron-indias-unesco-world-heritage-forts-to-explore/slidelist/114282776.cms" data-type="tilCustomLink" target="_blank">Amber to Gagron: India’s UNESCO world heritage forts to explore</a> </h2>

Weekend wrap: IPO myths, quick commerce gone wrong and more

<ul class="summary-list"><li>Louis Lehot, a Silicon Valley law-firm partner, specializes in taking companies from startup to IPO.</li><li>Lehot gave his suggestions for how to prepare, like hires to make and risks to consider pre-IPO.</li></ul>The IPO market is expected to pick up later this year, so Business Insider emailed Silicon Valley lawyer Louis Lehot, a partner at Foley &amp; Lardner, for advice on how startups should prepare for life as public companies.Lehot has more than 25 years of experience advising businesses, financial sponsors, venture capitalists, investors, and investment banks on topics including equity offerings, mergers, acquisitions, and spinoffs. His work often involves helping startups prepare for initial public offerings.The following has been edited for brevity.What's the environment like for IPOs?2023 was the toughest year for IPO activity in more than two decades. The IPO outlook for the second half of 2024, or at least the first half of 2025, can only get better.Riskier assets, such as Bitcoin, have rebounded strongly, suggesting risk appetite is a lot higher. The Fed is expected to make at least one rate cut later this year. The after-market performance of some recent IPOs has been stronger. Earnings reports from public companies are improving.There's a substantial backlog of companies preparing to go public as soon as the window opens, and the outcome of important federal and state election races should bring greater clarity.Which sectors are most likely to be successful in an IPO?<ul><li>Healthcare and Biotech: These companies go public as part of their venture financing path, often before they have a product in the market. As a result, they are heavily risk-driven, and the opportunity to make alpha with smaller amounts of capital invested is real. If risk appetite is truly back, we can expect investors to pile into biotech, life sciences, and medical device IPOs. New tech, enabled by CRISPR and AI, should increase the speed and accuracy of clinical trials.</li><li>Green Energy: As the effects of climate change spread, we expect industrial policy to favor renewable energy companies and the ecosystem that they enable, maybe even nuclear energy. Renewables and related technologies are gaining traction with a growing focus on sustainability.</li><li>Enterprise software and fintech: There's a solid backlog of late-stage private companies whose venture capital and private equity investors require a public market exit to return capital to limited partners and raise new funds. As a result, we expect a bumper crop of enterprise software (B2B solutions, cloud services, and cybersecurity) and fintech companies (digital banking, payments, and financial services) to come to market when the window opens later this year or next.</li></ul>Are public market investors generally keen to invest in IPOs, or are they focused elsewhere?Public market investors are selective, focusing on established profitability and sustainable growth over speculative, high-growth stories. Many investors are diverting their attention to safer, more predictable assets due to market volatility and economic concerns.What are IPO investors expecting in the current climate?<ul><li>Profitability, or a clear path to profitability: Unlike previous periods focused solely on growth, profitability is now critically correlated to a successful IPO.</li><li>Sustainable revenue growth: Consistent and predictable growth trajectories</li><li>Robust metrics: Strong KPIs and unit economics</li><li>Valuation discipline: More conservative valuations compared to the frothy markets of past IPO booms</li></ul>Should tech startups want to go public right now?If you have a choice, you stay private.For example, if you're the CEO of a successful startup with more than $100 million in revenue that's growing in excess of 30% at over 40% gross profit margins, every door is open to you.There's ample private capital to finance your company's scaling needs. There is likely a robust secondary market for your personal shares if you need to take some chips off the table. You have no obligation to report your compensation and equity holdings publicly or your company's quarterly results, much less live under the public microscope and the constant glare of Wall Street analysts who are focused on reporting on any short-term event that might drive trading.Fringe benefits include more control over business decisions, fewer regulatory requirements, and the ability to focus on long-term growth.The choice is not even close. Any CEO-founder would want to stay private. Look no further than the example of the <a target="_blank" class="" href="https://www.businessinsider.com/how-collison-brothers-built-stripe-most-valuable-us-startup-2021-3">Collison brothers at Stripe</a>.However, the characteristics that drive a transformational CEO-founder to achieve this level of commercial success are not necessarily driven by the same logic.The vision of a transformational CEO extends far beyond the perceived short-term benefits of a quick exit. I'm surrounded by mission-driven CEO's with the burning ambition to achieve global market ubiquity, which usually means an IPO is a necessary step on their long road.What are the most important hires to make before an IPO?<ul><li>Chief Financial Officer: A CFO with public company experience is crucial for navigating financial reporting and investor relations.The CFO of a public company is the first or second line of communication with Wall Street, key long-term investors, auditors of your financial statements, and financial regulators. In addition, the finance department will quickly need someone who can manage internal controls over financial reporting and write public financial reports. This person is usually a "controller."The CFO will also need someone who can forecast, model, and plan ahead and ensure that the company, when going public and forever thereafter, accurately telegraphs its future performance on a forward-looking, one-quarter, and one-year-ahead basis. This is usually a vice president for forecasting, planning, and analysis, or FP&amp;A. For larger public companies, a chief accounting officer is also on the road map.</li><li>General Counsel: Whereas 20 years ago, a general counsel was not hired until just before an IPO, nowadays, a company with $10 million of revenue or more may consider hiring a head of legal in-house to control costs, particularly for rote, repeatable tasks. But an IPO puts the company under a microscope of regulatory, investor, employee, and public scrutiny where the stakes get large enough that an experienced general counsel is usually hired, and if large enough to support the cost, even a deputy general counsel for securities law compliance to manage the more hours intensive processes of making the company ready for IPO and maintaining compliance thereafter.</li><li>Investor Relations Officer: About a year ahead of the big day, a forward-thinking CFO will try to hire a vice president of investor relations who has been through the process of managing a syndicate of analysts before, during, and after an IPO. Particularly for larger companies who garner analyst coverage from six or more sell-side and buy-side analysts, making sure the analysts are getting adequate information to build quality models will ensure higher quality coverage and greater liquidity for the company once public, which is a critical indicator of success.</li><li>Audit Committee Chair: While a pre-IPO company will seek to hire a majority-independent board of directors, the audit committee chair is one key role to fill on the board.The audit committee chair is usually a former CFO who has deep knowledge of the IPO process and the interplay of a board of directors and its independent registered public accounting firm, which is a critical relationship at every stage of an IPO and beyond.The audit committee's role is to oversee the production and auditing of the financial statements and the financial integrity of the company's public disclosures and compliance with regulatory standards. The audit committee chair will want to make sure there are at least two other directors who can serve independently on the audit committee who are financially literate and expert enough to assist them.</li></ul>What are the biggest changes startups must go through to be IPO-ready?To consider a successful IPO, a tech company will need to have line of sight to $100 million in revenue with eight quarters of historical growth and line of sight to eight quarters in the future of predictable growth. For a tech business, annual growth in GAAP revenue will need to be in excess of 20% (and ideally double this amount) at gross margins of 40% or more. These are herculean feats that few businesses will ever achieve.There also has to be some other ingredient, which some call the "sizzle," to inspire long-term fundamental investors to believe that growth can be significantly greater than what the models show over the next eight quarters.Historically, that sizzle could be explained by exposure to international markets that would be enabled by the scaling capital provided by the IPO.Today, revenue from a US tech business may well be evenly split between US and international markets from the outset, so the "sizzle" will need to come from planned advances in technology, new product releases, and new product enhancements that will unlock new and significant branches of growth.What are the key process changes companies need to make ahead of an IPO?<ul><li>Leveling up the company's financial reporting function: Enhanced accuracy and transparency in financial statements is an absolute necessity, both historically and forward-looking for eight quarters in both directions.</li><li>Corporate governance: Companies need to recruit an experienced, independent, and supportive board that can provide wisdom to management during the IPO process and beyond.</li><li>Operational scalability: Ensuring systems and processes can support growth and compliance requirements. Have you installed a world-class ERP software system? Do you have a contract management system and CRM software? Do they all work together?</li><li>Compliance and risk management: Implementing robust controls to meet regulatory standards is a playbook that a new CFO and new General Counsel can implement with the help of outside advisors.</li></ul>

How startups can get in top shape for an IPO, according to Silicon Valley lawyer Louis Lehot

In response to higher-than-expected tax revenue and a record surplus transfer from the Reserve Bank of India (RBI), the Indian government is considering an 8-10% increase in <keyword id="20018917" type="General" weightage="20" keywordseo="capital-expenditure" source="keywords">capital expenditure</keyword> (capex) for the fiscal year 2025, according to Pantomath Group's quarterly report, "Market Kaleidoscope: Quarterly Market Insights." This adjustment could raise the capex from the previously allocated Rs 11.11 lakh crore, aiming to bolster infrastructure and economic growth. This fiscal boost comes as India reaches a historic financial milestone. The total market capitalization of all stocks listed on the Bombay Stock Exchange (<keyword id="19895774" type="General" weightage="20" keywordseo="BSE" source="keywords">BSE</keyword>) briefly surpassed $5 trillion for the first time, placing India among global giants such as the US, China, Japan, and Hong Kong. India's primary market is set for a dynamic period, with 55 companies planning to raise over Rs 68,000 crore through Initial Public Offerings (IPOs). The first half of FY2025 has already seen 35 mainboard IPOs, collectively raising around Rs 32,000 crore with an average subscription rate of 61 times. The Indian market maintained a positive outlook in the first quarter of FY2025, driven by strong Q4FY24 earnings, favorable economic data, and positive global cues. Despite early June volatility following the 2024 <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> election results, market sentiment improved with the BJP securing 272 seats and a total of 292 seats for the NDA with allied support. This political stability under Prime Minister Narendra Modi's leadership is expected to promote long-term economic growth, with a focus on infrastructure, electric mobility, startup support, power distribution, digital privacy, and healthcare initiatives. Corporate India's performance in the March quarter of FY2024 met expectations, showing double-digit growth in net profit and single-digit revenue increases. Non-lending companies experienced moderate operating margin expansion due to favorable commodity prices and cost controls. The peaking interest rates and continuity of <keyword id="19978691" type="General" weightage="20" keywordseo="government-policies" source="keywords">government policies</keyword> are anticipated to support healthy corporate growth in FY2025. <h2>Growth to continue</h2>The government's push for increased <keyword id="20068449" type="General" weightage="20" keywordseo="ethanol-production" source="keywords">ethanol production</keyword> targets a 20% blending by 2026, benefiting ethanol-heavy sugar companies and promoting biofuel goals. The real estate market is projected to grow significantly, requiring Rs 14 lakh crore in debt financing from 2024 to 2026. This growth will positively impact the banking and financial sectors. Major telecom operators have raised tariffs post-election, potentially improving sector financials and paving the way for sector re-rating. Major cement players are expanding through acquisitions, with an expected 6-7% compounded growth and market dominance by the top five players by March 2025. FMCG Companies expect recovery in rural business due to factors like a normal monsoon, robust crop yields, and government measures, maintaining robust rural demand. The potential roll-out of the FAME 3 Scheme to support <keyword id="19963112" type="General" weightage="20" keywordseo="electric-vehicle-sales" source="keywords">electric vehicle sales</keyword> is anticipated, with a budgetary allocation of around Rs 10,000 crore. Sectors such as auto, cement, defence, railways, consumer durables, energy, and banking are expected to outperform. Lagging sectors like IT and specialty chemicals offer value-buying opportunities at lower levels. The structural bull market for Indian equity is supported by strong domestic fundamentals and government reforms, with a positive medium- to long-term market outlook. Globally, the US market showed resilience, except for the Dow Jones. The Federal Reserve maintained interest rates at 5.25-5.50%, awaiting inflation to move towards the 2% target before considering rate cuts. The US GDP grew at 1.4% annually in Q1 2024, with mixed economic indicators highlighting both strengths and challenges. The Indian <keyword id="19926041" type="General" weightage="20" keywordseo="IPO-market" source="keywords">IPO market</keyword> has seen significant growth, with a surge in companies seeking to list shares and a rise in capital raised. The first half of 2025 saw strong retail investor participation, reflecting confidence in India's growth prospects. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private Limited, said, "Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. The IPO market will experience a stronger pull post-budget. India is set to become the new equity funding frontier for global corporations." He further added. "We are on the brink of sustained, long-term momentum in the IPO market, with this year potentially becoming the best for IPOs. India's solid macroeconomic environment and promising growth prospects create an ideal backdrop for this vibrant IPO market. Additionally, there is robust participation from both domestic institutional investors and retail investors." With the Indian government's potential capex increase and the robust primary market activity, the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> is poised for sustained growth. The upcoming period is expected to see heightened market activity, further IPOs, and economic stability, creating a conducive environment for investment and development.

You Searched For "top performed IPOs" and got 6 results

Why investing in SME IPOs should not be on top of your adventure to-do list!

BI India Bureau

SIMPLY PUT: Why investing in SME IPOs should not be on top of your adventure to-do list!

Ira Alok Puranik

2025 could bring a wave of healthcare IPOs. Here's what startups should know, according to a top banker.

Rebecca Torrence

Weekend wrap: IPO myths, quick commerce gone wrong and more

Divyanshi Sharma

How startups can get in top shape for an IPO, according to Silicon Valley lawyer Louis Lehot

Alistair Barr

India may boost FY25 capex by 8-10% amid surging revenues and record RBI surplus, says Market Kaleidoscope report

ANI

Popular Keywords

Buying Guides