After the listing of Food Delivery startup Zomato, tech/tech-enabled service-providing companies, and their investors have found a lot of confidence. Last week, a number of companies came to the primary market to open bids for their shares, and this week again, a number of Indian unicorns are lining up to offer their equity to retail investors. Let us look at them one by one and see if they are worth investing in.
Nykaa (FSN E-Commerce Ventures Limited) - Nykaa started off as an online retailer of skincare products in 2012 and in 9 years, it has grown rapidly to expand into multiple product categories and open brick and mortar stores across India. Founded by the wife of KKR's CEO in India (Sanjay Nayar) - Falguni Nayar, the company now also offers apparel. The company turned profitable during FY20-21. For me, this is an IPO worth investing in, simply because there is tremendous scope for expansion, the business benefits from demographic tailwinds, and doesn't really have meaningful competition.
The issue is already oversubscribed with last day of bidding today -
FINO Payments Bank Limited - FINO is a digital bank that was set up in 2017! This company is getting listed within 5 years of incorporation. That is a dream run for investors. Despite being a digital bank, the bank's focus is rural customers that have a low level of technology literacy.
In 2020, the Ministry of Electronics & Information Technology ranked Fino payments third among banks in facilitating digital transactions in India. According to CRISIL, the company also has the largest network of micro-ATMs and the third-highest deposit growth rate in FY' 2021.
The company also turned profitable during the last financial year. The list of lead managers is solid and this may be an investment for the long term. Management is experienced and has done a solid job given the list of achievements mentioned above.
PolicyBazaar (PB Fintech Limited) - PolicyBazaar is India's biggest online insurance comparison site.
The company provides convenient access to insurance, credit, and other financial products and aims to create awareness in India about the financial impact of death, disease, and damage.
The issue has opened today and I have used the website countless times. In fact, most financial searched on google will show PolicyBazaar as the first result. The company also owns PaisaBazaar that helps consumers compare loans, including credit cards. Capital Light model, tremendous customer reach - what's not to love about this company. The company is not profitable yet, but there is hope for this company.
The next IPO to open next week is Paytm. I will cover this in another article. However, this is going to be the biggest IPO offering in India to date and I am truly excited about this one too.
Do your own research before investing.