SoftBank Group’s Indian portfolio companies food delivery firm Swiggy, eyewear brand Lenskart, omnichannel retailer FirstCry, and business-to-business commerce startup OfBusiness are preparing to go public soon, Navneet Govil, executive managing partner and CFO at SoftBank Vision Fund, told The Economic Times in an interview.
These startups are at various stages of preparing for their IPOs, with companies like FirstCry expected to file their draft IPO papers by the end of 2023, Govil said.
The Japanese firm’s Vision Fund, which returned to the black for the first time in six quarters, is expected to start making new investments, even as the group reported a third consecutive quarterly loss, hit by declines in valuations for major investments such as Alibaba Group, Deutsche Telekom, and T-Mobile U.S.
“The companies that aren’t going to do well are those that have already been identified and have been written down, quite significantly,” Govil said.
Govil’s comments on the companies going public come at a time when several factors, including a market correction, high valuation multiples and low earnings of IPO hopefuls, outflow of foreign capital amid rising interest rates, governance problems at large corporations, and more stringent regulatory norms have resulted in a weak market sentiment.
Recently, Tiger Global-backed conversational messaging platform Gupshup joined a growing list of Indian companies either delaying or calling off their IPO plans amid a muted public market.
Earlier this year, Indian skincare startup Mamaearth said it is putting its IPO on hold, while SoftBank-backed Indian hotel aggregator OYO Hotels and Homes Pvt Ltd has reportedly lowered its IPO size to $400-600 million from $1.02 billion earlier.
However, there are still companies waiting to test out the public markets in India. Naspers’s payments and fintech business PayU is planning to list in India at a valuation of $6-6.5 billion, reported Moneycontrol last week. Earlier this week, Meesho’s chief financial officer Dhiresh Bansal told Reuters that the company is planning an IPO in the next 12-18 months.
Separately, Ola Electric is also known to be having conversations with investors in Singapore and the US on its planned stock market listing, the first of a series of meetings for its up to $1 billion IPO, Reuters reported in June.
Out of Swiggy, Firstcry, Ofbusiness, and Lenskart, Ofbusiness is the only company making profits. OfBusiness saw its net profit balloon over 3.6 times to Rs 201.11 crore in 2022 versus Rs 55.6 crore in 2021.