IPO or Initial Public Offering is how a privately owned company starts to publically trade in the market by offering it’s shares for sale. Small firms or start-ups that manage to grow their business successfully and have a strong potential, decide to go public to raise funds in order to expand or strengthen their business operations.
The year 2020 saw some of the hot stock IPOs like Burger King, SBI Cards and Payments Services, Rossari Biotech, Happiest Minds Technologies and 2021 is surely going to witness a variety of big releases owing to the record highs of Sensex and Nifty in 2021.
Investors are eagerly waiting to invest in IPOs to book reasonable returns and there is no shortage of well known private companies that are ready to go public. IPOs help investors to get early access and fast access to these companies and to earn big profits.
Although, IPOs target mostly institutional investors who are capable of investing in huge amounts when compared to retail or individual investors who might invest in small amounts.
Here are four of the hottest stocks that have caught everyone’s attention in 2021.
One of the major hot stocks that everyone should look out for in 2021 is Zomato. The Gurugram based food delivery company is all set to raise $1.1 billion through its initial public offering during this year and is currently valued at $8 billion.
The company’s prospectus filed with SEBI shows it’s plan to raise $1.01 billion in new issue shares while the company’s top shareholder InfoEdge will offer shares worth $101.2 million for sale.
Initially started as a restaurant finding company by Deepinder Goyal and Pankaj Chaddah in 2008, it showed strong business performance and great potential as it transformed itself into a successful food delivery platform.
It has successfully dealt with a setback during the pandemic and has managed to hold its ground against it’s rival Swiggy which dominates the food delivery market with 47% market share against Zomato’s 45% market share.
Zomato is the hot stock to look forward to in 2021 as the company has grown 3 times over in the last 4 years with its presence in 23 countries and in terms of growth in revenue and faster customer acquisitions.
The only government owned insurance company in India is now going public with its IPO. In the budget session of financial year 20-21, finance minister Nirmala Sitharaman confirmed that the IPO of LIC was to be completed in 2021. The minister confirmed that upto 10% of the IPO will be reserved for policy holders.
The government is aiming to raise funds to the extent of Rs 80000 crores through this IPO. It is said to be the biggest IPO to be listed on Indian stock markets and also the much awaited one.
Established in 1956, LIC has a market share of around 69% in the life insurance space according to it’s 2019-20 report. The company is valued at Rs 9-10 lakh crore and has 28 crores of policies in force with a total premium collection of Rs 45 lakh crore.
It is probably the most discussed IPO of the year as almost every other person in the country has an LIC policy and so it is now in the general conversation among the public regardless of if one is an investor or not. This hot stock is something everyone wants a piece and is being called the Mega IPO.
India’s payments and wallet giant has decided to raise $3 billion through fresh equity. As the company takes a step closer to its IPO a notice was sent to its existing shareholders asking if they want to sell their shares.
Paytm competes with Google pay and Phonepe to maintain its strong hold in the market. The company reported a loss for the financial year of March 2021 and is anticipating the IPOs success.
Paytm is a Noida based company currently valued at $16 billion. It is owned by One97 communications, and is backed by Alibaba and Soft bank.
It is said that the company is ready to file it’s red herring prospectus to SEBI very soon and it is also reported that an extraordinary general meeting is said to be held on July 12, 2021.
The Indian E-commerce company controlled by Walmart Inc., has finally decided to go public by the fourth quarter of 2021. The company aims to raise about $1 billion and is currently valued at $25 to $30 billion.
The Bangalore based start-up founded in 2007 sold a majority of its stake to Walmart for $16 billion in 2018. Experts say that this IPO is a brilliant move by Walmart as it is eager to reinvent it’s image to a diversified company focused on the future.
Today Flipkart has over 300 million registered users and over 150 million products in over 80 categories. With ecommerce becoming more prominent during the pandemic the company is looking at more sales and more revenue in the coming years, onboarding millions of users as they turn to online shopping.
Flipkart will be the first Indian startup to be listed and traded on the US stock exchanges as well.
A lot of companies are in the IPO race to raise funds to sustain or to grow in the market. 2020 has been a great year for IPOs in India. Despite the pandemic, the stock market saw a surge in private companies going public with over a dozen companies going public and raising over $1.84 billion.
The above listed are some of the hottest stocks to go for in 2021 and analysts predict that the bull run of 2020 will continue this year too.
It is now easier to subscribe to new IPOs through the online ASBA (Application supported by Blocked Amounts) facility provided by most banks.
It is important to note that sometimes well known private companies may not do well when they start out in the stock market. Therefore careful investment is necessary to survive in the long run.