Technology start-ups look to JustDial IPO for cue
At least a dozen start-ups are anxiously awaiting the final subscription numbers for JustDial's initial public offering (IPO) to get a sense of the market mood. HT reports.business Updated: May 22, 2013 02:20 IST
At least a dozen start-ups — from travel portals Cleartrip, Yatra and RedBus to online shopping sites Homeshop 18 and Snapdeal and matchmaking website Bharat Matrimony — are anxiously awaiting the final subscription numbers for JustDial's initial public offering (IPO) to get a sense of the market mood.
With India’s broadband Internet population eyeing 150 million and the e-commerce market exceeding an estimated Rs. 50,000 crore, a host of technology start-ups are gaining traction, waiting for the right time to tap the market through the IPO route.Internet and telephone-based product and service search service JustDial, set up in 1991 with an initial investment of Rs. 50,000, is looking to raise Rs. 950 crore through a 25% stake sale. The issue had raked up a response of more than 70% on Tuesday, the second day of the issue.
Taking a cue, a number of companies are looking to get listed on the stock exchanges in the next two-three years to reward their early investors and improve cash follows.
“The success of JustDial IPO will certainly send out a positive signal that Indian investors are open to such new business models,” said Neetu Bhatia, co-founder and CEO of Kyazoonga, an online sports and entertainment ticketing company.
Investors are also betting on Just Dial to buck the earlier trend of muted response to public issues. Travel portal MakeMyTrip’s issue price was $ 14 per share in August 2010 when it got listed on the Nasdaq. It currently trades at $12.68.
Sulekha.com, one of the pioneers in the e-commerce space, planned an IPO in 2009 but it never materialised.
“Wireless Internet browsing (through phones) is bound to increase in the coming years because of continuous decline in prices of smartphones, which goes well for online companies,” said Abhishek Shindadkar, analyst at ICICI Securities.
He said global firms like Google, Alibaba and eBbay are competitors but India’s vast population provided enough space for Indian companies.