The Indian tech, media, and telecom (TMT) IPO market was going strength to strength till 2021, but the trend has reversed in 2022. Amid the rising market volatility and economic slowdown, the companies listed in 2021 are now struggling to match the COVID-19 pandemic-boosted share prices and are trading below their IPO valuations. This has weakened the IPO pipeline as companies are delaying their listings and slashing their IPO valuations, says GlobalData, a leading data and analytics company.

India had a record year for TMT IPOs in 2021. Between 2018 and 2020, there were 15 TMT IPOs in India. 2021 alone saw 15 Indian TMT companies going public and raising total proceeds of $4.8bn.

Swati Verma, Associate Project Manager of Thematic Research at GlobalData, comments: “In 2021, listings were propelled by internet-driven themes like e-commerce and fintech. Fintech player Paytm’s listing in November 2021 was the biggest TMT IPO ever in India. The IPO of e-commerce player Zomato was the second biggest. Other notable listings were PolicyBazaar (insuretech), CarTrade (online car selling platform), and Nykaa (online beauty & wellness).”

However, the companies that listed in 2021 are now struggling to match the COVID-19 pandemic-boosted share prices and are trading below their IPO valuations. Paytm is now valued at $5.1bn, two-thirds lower than its IPO valuation. PolicyBazaar’s valuation has also fallen by 40% since it began trading.

Verma concludes: “Many e-commerce players are making a loss as they attempt to scale up and have seen a downward trend in their valuations. Zomato’s valuation has fallen by 35% since its first day of trading and is now valued at $8bn. Nykaa was valued at $13bn during its listing but is down by 20%.

“Amid the rising market volatility, global economic slowdown, and the fear of the next wave of COVID-19, the IPO pipeline in India is losing its momentum. Many companies including Ola (ride sharing), Mobikwik (digital payments), and Delhivery (e-commerce logistics provider) have deferred their IPO plans. In addition, Oyo (online hotel booking) and Pharmeasy (online pharmacy) have been forced to slash their target valuations. As a result, the first quarter of 2022 recorded a dry spell in the Indian TMT IPO market.”