Yearender 2021: The year 2021 has proved to be the best IPO year for Indian primary markets in the last 20 years. A total of 63 companies got listed so far in the calendar year 2021, raising Rs 1.18 lakh crore through IPOs, the highest raised in a year. The year-on-year IPO activity in India increased 156 per cent in numbers to 110 deals in 2021. Amid coronavirus- triggered pandemic, the year 2021 also witnessed public issues by internet companies such as Paytm, Zomato, Nykaa, Policybazaar, among others. Besides IPOs, Tata Sons acquiring Air India, a bill seeking to ban all private cryptocurrencies were among the top business news that created a buzz in 2021.
Let’s have a look at the top 5 business news of 2021:
1: IPOs that created a buzz in the market
Food delivery platform Zomato made a stellar debut on bourses on July 23. During the three-day period, the Zomato IPO received bids for 27,51,27,77,370 shares against issue size of 71,92,33,522 shares. The price band was set at Rs 72-76 apiece, which ascribed the company a valuation of $9 billion. The IPO of Zomato was India’s biggest initial share sale offer since March 2020. The IPO had opened for subscription on July 14, in a price band of Rs 72-76 per share. It closed on July 16. Shares of Zomato were listed at Rs 116 apiece, a premium of 53 per cent to the IPO price of Rs 76. The company’s market cap currently stands at Rs 99,790 crore. Incorporated in 2008, Zomato is present in 525 cities in India, with 3,89,932 active restaurant listings along with a presence in 23 countries outside India.
Nykaa, formally known as FSN E-Commerce Ventures Ltd., share listing made investors rich and promoters richer, with the stock nearly doubling from the IPO price. Falguni Nayar and her family still own a 56.56% stake after the company’s listing. The price band for the Nykaa IPO was set at Rs 1,085-1,125 per share, at the upper end of which the company was valued at Rs 53,204 crore, or about $7.1 billion. With a market capitalization of $14 billion, Nykaa has comfortably broken into the club of India’s top 100 most valuable companies. Moreover, Nykaa founder and CEO Falguni Nayar became India’s richest self-made woman billionaire, according to the Bloomberg Billionaires Index. The company’s market cap currently stands at Rs 95,780 crore.
The IPO of One97 Communications, the parent company of Paytm, was open for subscription from 8 to 10 November. The Rs 18,300 crore IPO was the largest in the country’s corporate history. However, the issue did not receive a much-expected response from investors. The PayTM shares have lost 37.45 per cent to close at Rs 1,344.75 on December 27. Its issue price was fixed at Rs 2,150. The company’s market cap currently stands at Rs 87,000 crore.
Policybazaar (PB Fintech)
The IPO of PB Fintech (Policybazaar and Paisabazaar operator) made a decent debut at the stock markets in November with a 17.35 percent premium. The IPO of India’s largest online insurance aggregator was subscribed 16.59 times. The price band was set at Rs 940-980 a share, which ascribed the company a valuation of Rs 44,051 crore. The company’s market cap currently stands at Rs 44,000 crore.
2: Tatas back in Air India cockpit
They say better late than never! After more than two decades and three attempts, the government has finally sold its flagship national carrier Air India, and it is deja vu for Maharaja as it returned home to its founding father the Tata group. For the Tatas, the original owners of Air India, bringing back the airline to its fold is worth the wait. Salt-to-software conglomerate Tatas have won the bid to acquire debt-laden state-run Air India offering Rs 18,000 crore for acquiring 100 per cent shareholding. Tata Sons beat SpiceJet promoter to bag Air India.
However, Tata Group’s takeover of loss-making national carrier Air India is most likely delayed by a month till January as the completion of procedures takes longer than expected. In October, the government accepted the highest bid made by a Tata Sons company for 100 per cent equity shares of Air India and Air India Express along with its 50 per cent stake in ground-handling company AISATS — the first privatisation in 20 years. At that time, the government had stated that it wanted to complete the transactions, which included Tatas paying Rs 2,700 crore in cash, by December end. However, some regulatory approvals are yet to come in for the handover, and certain formalities are yet to be completed. The process would be completed by January the official, who wished not to be named, had told PTI.
3: Bill to ban all private cryptocurrencies
With an estimated 15 million Indians holding digital currencies, the Centre was all set to introduce a bill banning all the private cryptocurrencies in India.
First, a Lok Sabha bulletin in January had said that the Centre will introduce a bill that would ban all the private cryptocurrencies. In the Budget 2021 session, which was presented on February 1, the Centre had planned to introduce a bill to ban all private cryptocurrencies in India and will also put in place the framework for an official digital currency to be issued by the Reserve Bank of India. The new bill was titled ‘The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021’. But in the end, the bill is not tabled.
Second, in November, the Centre once again appeared likely to introduce a bill banning cryptocurrencies during the winter session of Parliament. Finance Minister Nirmala Sitharaman in Rajya Sabha had said the government is working out a new Bill on cryptocurrency which will be placed in the ongoing session of Parliament after approval of the Union Cabinet. However, the bill was delayed again as the government was reportedly considering changes to the proposed framework.
Meanwhile, the Reserve Bank of India (RBI) is firm on its point of banning private cryptocurrencies as it poses immediate risks to customer protection and is prone to fraud. Private cryptocurrencies pose immediate risks to customer protection and are prone to frauds and extreme price volatility, given their highly speculative nature, the Reserve Bank of India (RBI) said in its financial stability report released on Wednesday.
“Private cryptocurrencies pose immediate risks to customer protection and anti-money laundering (AML)/combating the financing of terrorism (CFT). They are also prone to frauds and to extreme price volatility, given their highly speculative nature,” it said.
4: FASTag compulsory at all Toll Plazas
The Ministry of Road Transport & Highways (MoRTH) had issued orders to make FASTag compulsory at all toll plazas in effect from February 15, 2021, all across India. FASTag is an electronic toll collection system that is operated by the National Highway Authority of India (NHAI) in India. This decision was taken to promote fee payment using the digital mode, to reduce the waiting time and fuel consumption. It would also provide a seamless passage of vehicles through the fee plazas. In accordance with the NH Fee Rules 2008, If any vehicle which is not fitted with FASTag or vehicle which do not have a valid, functional ‘FASTag’ will enter into the ‘FASTag lane’ of the fee plaza will have to pay a fee equal to two times the fee which is applicable in that category.
5: DGCA raises the Domestic Airfares
The Directorate General of Civil Aviation (DGCA) had announced an increase in the fares of air travel on February 11, 2021. The fare was increased up to Rs 5,600. The government had highlighted that the fare hike was necessitated because of the opening of the aviation market. While the Ministry of Civil Aviation (MoCA) had said that the fare hike was a routine change. The upper price band had increased by 30 percent on 180–210-minute flights. This amounted to a hike in the price of Rs 5,600. Thus, the price rose from Rs 18,600 to Rs 24,200. While the lower band of the price for the shortest route had increased by 10 percent. This amounted to an increase of Rs 200. The domestic fare band had also increased. The lower price band of the domestic flights increased from Rs 2,000 to Rs 2,200 while the upper price band increased from Rs 6,000 to Rs 7,800. For the highest fare band, the minimum fare had jumped from Rs 6500 to Rs 24200 while the maximum fares rose from Rs 18,600 to Rs 24,200.