Best Upcoming IPO In India – Strength & Risks

An Initial Public Offering (IPO) is a privately held company’s first sale of stock to the general public. Companies that go public raise funds for operating capital, debt payments, acquisitions, and a variety of other purposes.

An online IPO application form is available from stockbrokers and banks, and it may be used by the investor to apply for IPO Stocks in India. Brokers provide UPI-based online IPO applications, whereas banks provide both UPI and ASBA IPO applications.

Although there are many upcoming IPOs, these are some of the best ones.

• Go Digit IPO
• Go FIRST IPO
• Bajaj Energy IPO
• OYO IPO
• boAt IPO

1. Go Digit IPO

Go Digit General Insurance Limited provides non-life general insurance products. It began as Oben, which is German for “Go Digit.” Nonetheless, Oben General Insurance Limited renamed itself Go Digit General Insurance to make things simple. The insurance company provides a wide range of non-life insurance products and solutions through its Go Digital platform.

The company, which is backed by a financial holding company based in Toronto, Canada – Fairfax – laid the groundwork in Bengaluru, India in 2016.

Go Digit Insurance claims to offer all customers simpler general insurance options. They want to make the entire insurance process easier and less stressful, from purchasing to registering claims.

The company provides several insurance products, including car insurance, travel insurance, bike insurance, home insurance, mobile insurance, and bicycle insurance.

Strengths

• A high-quality client experience is provided through providing relevant, clear, and adaptable coverage, as well as simple documentation and easy, efficient, and paperless operations.
• A strong distribution partner network by providing them with different access platforms, point-of-sale solutions, and insight-building tools.
• Underwriting models that are predictive.
• An innovative technological platform that improves efficiency by utilising Al and machine learning technologies.
• A lean organisation run by a capable and experienced management team.

Risks

• The company has a history of declaring losses and may never achieve profitability.
• Due to the lack of operating history, it is difficult to accurately assess future company possibilities.
• The company’s loss reserves are based on predictions of future claims obligations, and if they prove insufficient, further reserves may be required.
• Inability to accurately underwrite risks and offer consumers competitive yet profitable premiums.
• The company may need additional financing to expand its operations, which may not be accessible on favourable terms.
• Any loss of or change in its ability to attract, retain, and incentivise distribution partners.

2. Go FIRST IPO

Go First, formerly known as GoAir, is an Indian ultra-low-cost airline based in Mumbai, Maharashtra. Wadia Group, an Indian corporate giant, owns it. In October 2017, it was India’s fifth largest airline, with an 8.4% passenger market share. It began operations in November 2005 and has an all-economy fleet of Airbus A320 aircraft.

From its hubs in Mumbai, Delhi, Bangalore, Kolkata, Hyderabad, and Chandigarh, and Kannur, the airline operated over 330 daily flights to 36 destinations, including 27 domestic and nine overseas destinations. The airline intends to make an initial public offering (IPO) to raise Rs 36 billion from the primary market and has filed a DRHP with the Indian stock market regulator SEBI.

Strengths

• The Airbus NEO aircraft has a seating capacity of 186 passengers and the Airbus CEO aircraft has a seating capacity of 180 passengers.
• As of February 2021, the average age of their aircraft was roughly 3.7 years, making it one of the youngest fleets in India and globally.
• Passenger volume climbed by 22.4% year on year, from 10.8 million in FY18 to 16.2 million in FY20.
• The company’s market share grew from 8.8% in fiscal year 2017-18 to 10.8% in fiscal year 2019-20.
• In FY19-20, India had the third highest aircraft use at 12.9 hours per day.
• A total of 98 A320 NEO aircraft have been ordered and will be delivered over the next few years.
• Marketing activities concentrated on the under-45 age range, which constitutes the majority of the Indian population.

Risks

• The COVID-19 pandemic has had a negative impact on company, operating results, financial situation, and liquidity.
• Departures for December 2020 were 63% of those for December 2019.
• Payment default in aircraft lease agreements, aircraft purchase agreements, and rising indebtedness as a result of the pandemic
• Difficulty to execute ULCC concept due to inability to generate large revenues and reduced aircraft utilisation.
• Between April and December 2020, the company will incur a net loss of Rs 470.69 crores.
• Several reasons, including difficulty to expand the network, delays/failures in delivering aircraft orders, changes in cost structures, and others, might have a detrimental impact on growth strategy.
• The reliance on automated systems and the internet raises the possibility of system breakdowns and security breaches.

3. Bajaj Energy IPO

Bajaj Energy Ltd. (BEL) is one of Uttar Pradesh’s largest private sector thermal generation businesses. In India, the company constructs, finances, and runs thermal power projects. BEL operates five 450 megawatt coal-fired thermal power plants in Uttar Pradesh. The overall gross installed capacity of Bajaj Energy is 2,430 MW. This includes 450 megawatts from 5 BEL-owned and controlled plants (the “BEL Power Plants”) and 1,980 MW from an LPGCL-owned and runs power plant (the “LPGCL Power Plant”). BEL expects to fully purchase LPGCL in the future utilising the revenues from the IPO offer.

Strengths

• One of Uttar Pradesh’s largest independent power generators.
• Central Coal Fields Ltd., a subsidiary of Coal India Ltd., is the primary fuel supplier.
• In Uttar Pradesh, the company is well-positioned to capitalise on the state’s needs.
• The assets are all located in Uttar Pradesh. Uttar Pradesh is India’s largest and most densely inhabited state.
• The total capacity of operational power plants is 2,430 MW. This is according to the 2019 draught red herring prospectus.

Risks

• According to the DRHP, LPGCL is embroiled in tariff payment disputes with UPPCL.
• Environmental damage is a danger of operations.
• The majority of the revenue comes from power sales to one customer: Uttar Pradesh Power Corporation Ltd. (UPPCL).
• Has previously failed to comply with some loan arrangements, resulting in default
• Despite long-term agreements, the company faces fuel supply uncertainties. BEL is mostly reliant on coal supply from Coal India subsidiaries.
• The lack of sufficient infrastructure may have an influence on the coal supply. Coal is heavily reliant on railway and road infrastructure.
• Tariffs are being scrutinised by the Uttar Pradesh Electricity Regulatory Commission (UPERC).
• According to the DRHP, UPERC has not authorised the final tariff for LPGCL.
• Seasonal fluctuations in financial results.

4. OYO IPO

OYO is a cutting-edge digital platform that is empowering the vast yet fragmented global hospitality economy. Since 2012, it has concentrated on the short-term accommodation market. Its distinct business model assists its clients in transforming fragmented, unbranded, and underutilised hospitality assets into branded, digitally-enabled stores with increased revenue generation potential. OYO offers its consumers high-quality stores at competitive prices.

Strengths

• In terms of hotel shops, India and Southeast Asia have the largest footprints.
• According to RedSeer, among full stack short-stay accommodation players, it has the second largest footprint in Europe in terms of house storefronts.
• The company does not own the stores featured on its platform, resulting in an asset-light business strategy and a lean cost structure.
• Platform for full-stack technologies
• Co-OYO and OYO OS are the two most prominent Patron applications.
• Patron satisfaction increased from 30.1% in the three months ending September 30, 2020 to 72.3% in the three months ending March 31, 2021.
• Unit economics have improved from 5.1% in Fiscal 2020 to 18.4% in Fiscal 2021, as indicated by Contribution Profit.

Risks

• The travel industry’s response to the Covid-19 outbreak.
• Prior year negative cash flows from operating operations
• Since its inception, the company has experienced financial losses every year.
• A significant quantity of debt in the past
• During a customer’s visit, we have no control over or capacity to forecast the activities of our patrons, customers, and other third parties, such as neighbours or invitees.
• Any negative conclusion in Zostel’s legal actions may have an impact on the company.
• The corporation is currently embroiled in a case before the Indian Competition Commission.
• A lawsuit is currently proceeding against the corporation, certain subsidiaries, directors, and promoters.

5. BoAt IPO

One of the largest Indian digital-first companies in terms of revenue from operations for the fiscal year 2021 is Imagine Marketing (boAt), a firm that specialises in digital-first consumer products. It was established in 2013 and is led by its main brand “boAt,” which debuted in 2014. It has products in several categories.

It sells audio wearables like as wired headphones and earbuds, wireless headphones and earphones (neckbands), bluetooth speakers, and home theatre systems. Smartwatches, gaming accessories such as wired and wireless headsets, mice and keyboards, mobile accessories, and personal care appliances are also included.

Strengths

• One of the largest Indian digital-first businesses, with market leadership in many rapidly increasing product categories.
• The flagship brand of the company, “boAt,” is a consumer brand with strong market positioning and a clear value proposition.
• Digital-first platform capabilities are aimed at enabling expansion and continuing to allow for the establishment of a presence across numerous consumer categories.
• The RedGear brand will serve the market for gaming headphones and controllers (keyboard, mouse, mouse pad, and joystick).
• Some items, such as Rockerz 255, Airdopes 131, and Storm Smartwatch, have received more than 4 (out of 5) evaluations from customers on online marketplaces.
• In January 2022, the business announced a collaboration with Dixon Technologies to produce “Made in India” wireless audio equipment.

Risks

• Success is dependent on the strength of the company’s flagship “boAt” brand and other brands.
• Failure to identify and respond to changing client preferences and market trends in a timely and cost-effective manner.
• Works in a highly competitive industry with substantial and well-established competitors.
• The production of its products is dependent on a variety of third-party contract manufacturers and component suppliers. 
• Risks linked with international procurement, such as geographical concentration and currency exchange risks.
• Disruptions in the company’s ties with some online marketplaces and offline distributors.
• Depending on the category of audio and wearables.
• Failure to appropriately protect its key brand ‘boAt’ and intellectual property.