Last year was a bumper year in terms of IPO(S). We had the Aramco IPO, which shattered most records out there. Bill Gates-backed Beyond Meat too had a bumper IPO. Beyond meat opened at $25 and is currently trading around $110 (on the day of writing) thereby providing a whopping 340% returns to the initial shareholders. On the other side of the spectrum, it was all gloomy for the Silicon Valley poster boys- Uber and Lyft. Uber has failed to go beyond its opening price of $45 and is hovering around $35. Lyft is struggling even more. Currently, Lyft is trading around $47 compared to its opening price of $72. India too witnessed a massively successful IPO in IRCTC that was subscribed 112 times.
2020 promises to be yet another massive year for the stock markets. In this piece, we look at the Top IPOs coming out this year (in no particular order) that are going to generate a lot of buzzes.
IPO of Airbnb
Brian Chesky led AirBnb will finally go public in 2020. The San Francisco based company has grown strength to strength in the last decade. According to Vox, Airbnb is currently valued north of $35 billion. According to Crunchbase, the company’s gross bookings grew 31 per cent year-over-year in the first quarter of this year to $9.4 billion (the dollar value of spend on its platform; the company collects a percentage of the total). The same report suggests that Airbnb has also a war chest of $3 billion, which makes it an attractive prospect. A major thorn in its path to a successful IPO would be its profitability. According to FastCompany, Airbnb had an operating loss of $350 million. Uber and Lyft have failed to generate investor confidence due to the high losses incurred by the company.
Burger King India
Fast food brand Burger King’s Indian business is set to be listed at the BSE after it got a nod by the Indian stock market watchdog SEBI. Burger King’s offer comprises fresh issue of equity shares aggregating up to Rs 400 crore and an offer for sale of up to 6 crore equity shares by QSR Asia, the promoter. Kotak Mahindra Capital Company, CLSA India Pvt Ltd, Edelweiss Financial Services and JM Financial are managing the initial share-sale. The company’s shares are proposed to be listed on the BSE and the NSE. Burger King has over 200 stores in India.
SBI Cards and Payment Services
The credit card unit of India’s largest lender, SBI plans to raise around Rs 9,600 crore through the IPO. SBI Cards has 18% market share next to HDFC Cards that holds 27% market share. According to Economic Times, SBI Cards & Payments Services is trading at a Rs 200-250 premium in the grey market ahead of its proposed share sale in February, said three dealers involved in such trades. The company is likely to be valued at Rs 57,000-60,000 crore in the initial public offering. With the listing of SBI Cards on bourses, the firm will become the fifth group company under SBI Group to be listed on exchanges. As part of the IPO process, its promoters, Carlyle Group, and State Bank of India (SBI) will make a partial exit from SBI Cards and Payment Services Ltd.
Also Read: Surat, the Diamond Capital of India
IPO of National Stock Exchange
NSE has planned to launch its IPO in September subject to approvals from SEBI. In a press statement, MD & CEO, Vikram Limaye told, “We have approached Sebi to seek its approval for the IPO and after that, we will start the process of appointing merchant bankers, who will help the exchange in filing draft prospects for the IPO.” According to a report by Live mint, banks that hold shares in the National Stock Exchange have expressed keen interest in offloading their stakes. State Bank of India (SBI), India’s largest bank, has already announced plans to sell 5 million NSE shares, representing 1.01% of the 5.19% it holds in the exchange. According to the same report, NSE aims to raise about ₹10,000 crores from the IPO, which would result in existing promoters selling 22-24% of their stakes. LIC of India, SBI Group, IDBI, Norwest Venture Partners and GS Strategic Investments Ltd (Mauritius) are among the shareholders that may sell a portion of their stake through the public offering