2023 holds little promise for tech IPOs as slowdown continues

The global economic crisis, which hit the companies’ initial public offering (IPO) plans in India in 2022, continues to haunt the founders and CEOs and the first two months of the new year went completely dry as no public offering was launched amid recession fears. Although some IPOs appear to be in the offing this month, the mood among the companies, investors and the public is yet to be lifted after a dismal December. Forty Indian corporates raised Rs 59,412 crore through IPOs in calendar year (CY) 2022, half of the Rs 1,18,723 crore (all-time high) mobilised by 63 IPOs in 2021, according to Prime Database, India’s premier database on the primary capital market. When it comes to big new-age internet companies, only fully-integrated logistics service provider Delhivery (Rs 5,235 crore IPO) and data intelligence firm Tracxn Technologies (Rs 309.38 crore) took the public offering route last year. Droneacharya Aerial Innovations also went public, with an aim to raise approximately Rs 34 crore through a new issuance of shares. Meanwhile, startups and tech companies that deferred their public offerings last year included Oyo, Snapdeal, Ola, Droom, MobiKwik, PharmEasy, BoAt and Flipkart. In 2021, 11 startups went public, including Zomato, Paytm, Policybazaar and Nykaa. Market experts believe there will be many more IPOs from March onwards. However, 2023 does not appear to be promising as of now as consumer demand is expected to stay low over the coming quarters, as inflation continues to rise, creating a further slowdown phase for the startups in the country. There is an ongoing risk of further escalation in the war on Ukraine and the current wheat crop being impacted by hot weather conditions, according to market research firm Redseer Strategy Consultants. Consumer perception of the general economic condition continues to be pessimistic as per the Reserve Bank of India’s Consumer Confidence Survey of January 2023, where more than 50 per cent of