The companies that raised $1 billion for IPOs in 2021 aren’t doing so well — half of them have been trading below their listing prices.
Financial Times (FT) writes that these numbers include some of the best-known names listing, including food delivery app Deliveroo, payments company Paytm and alternative food manufacturer Oatly.
The performances raise questions about the valuations of the companies, which have been bolstered by big investors like SoftBank and Warburg Pincus, as stock markets around the world have been doing very well.
The FT report says that, among the 2019 big IPOs, 33% were sitting below issuance price a year after they went to market. Twenty seven percent in 2020 were in the red after a year.
The report says Deliveroo shares were down 26% on day one and are still below their listing price, while Paytm fell over 40% in the first two days — suffering the largest first-day fall of any of the big listings — and now is considered one of the worst debuts in Indian stock market history.
Bankers said Paytm had wanted to set a record for Indian IPOs. This had a negative effect for long-only investors, who had more conservative attitudes. Because of this, some hedge funds got bigger allocations and then dumped the stock.
Meanwhile, shares of Didi Chuxing, the Chinese ride hailing app, are also down 40%.
FT places the blame on Beijing’s crackdown on tech, which happened after Didi listed in New York against the advice of regulators.
PYMNTS writes that Paytm has revealed it saw its net loss boost by 8.4% as its expenses rise. That came as the FinTech reported its earnings publicly for the first time since it debuted on the stock market in November 2021.
The company said it had consolidated net loss of 4.74 billion rupees, an increase from the 4.37 billion from the same time in 2020.