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The Collection Wed, 15 Jan 25 |
Multiple stories, multiple perspectives, one theme worth your time—every week. |
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Welcome to the very first edition of The Collection! This is Rahul, and I tell stories based on the articles, newsletters, and podcasts we publish at The Ken. You may not have heard from me before—usually, my work appears on The Ken’s social media feeds. But today, I’m here to start something special.
Since our launch in 2016, The Ken has published hundreds of longform articles, newsletters, infographics, and podcasts on an expansive collection of subjects. E-commerce, finance, capital markets, startups, tech, climate, leadership, careers… our archives are, frankly, voluminous, and filled with valuable insights and information.
So starting today, every Wednesday at 11 a.m. IST, I’ll work with my talented colleagues to bring you fresh perspectives on a wide range of themes, supported and informed by The Ken’s extensive archive.
Our first theme is 2025’s initial public offerings (IPOs).
Some reason for caution
Zepto. Ather Energy. LG India. Physics Wallah. Boat.
The list of potential public-market listings lined up for 2025 features quite an interesting cast of characters. Some have publicly announced that they want to take advantage of the multi-year bull run in India’s stock markets. Others are reportedly considering doing the same.
With over Rs 1.8 lakh crore (US$21 billion) raised and over 90 mainboard IPOs, 2024 was a record-breaking year for new listings in the country. Many stock-market analysts predict an even stronger 2025.
But there is reason for caution—both for the companies hoping to woo retail investors and the investors themselves.
When the bulls are on the backfoot, as is the case now, things can quickly head south. This has happened before. In the 2021 IPO wave—the best year for market listings in two decades—there were 76 mainboard IPOs, and over 1.3 lakh crore was raised by going public. But in the following year, there were only 56 such listings and the fundraising halved due to weak market conditions.
It isn’t obvious which way 2025 will go.
Dr Agarwal’s Healthcare
Backed by Temasek Holdings and TPG, the hospital chain received Sebi’s nod for an IPO just last week. It hopes to raise Rs 300 crore from a fresh issue of shares, along with an offer for sale of 6.95 crore shares by the promoters and investors.
Dr Agarwal’s is one of India’s largest eyecare-service chains, and specialty hospital enterprises are among the fastest-growing segments in healthcare. But a particularly difficult challenge for hospitals in the country remains doctor retention, and Dr Agarwal’s is no exception. In fact, today’s Long and Short newsletter by Seema Singh breaks down the company’s draft red herring prospectus through that perspective.
If you speak to any doctor-entrepreneur, or even a professional CEO of a hospital these days, doctors’ skyrocketing salaries weigh on their minds. For instance, cancer chain Healthcare Global founder BS Ajaikumar recently told me that some doctors make Rs 30–40 lakh a month. Retaining or attracting doctors has become core to the business strategy.
While hospital chains like Cloudnine or Indira IVF offer stock appreciation rights (SARs) to their doctors, Dr Agarwal’s is introducing something new. A Doctors’ Incentive Plan (DIP) that grants “units” to doctor consultants, entitling them to a cash payout equal to the stock appreciation. As much as 50% of the cash payout will be made within one month of the IPO, with 25% paid after 12 months and the remaining 25% after 24 months.
Dr Agarwal’s IPO papers show how dire doctor retention is in Indian healthcare
Zepto
The quick-commerce company raised over US$1.3 billion in 2024 and plans to join rivals Zomato and Swiggy this year on the public markets. If you rule out mergers and acquisitions, an IPO is the only exit option for Zepto’s existing venture-capital investors. And perhaps they have good reason to be hopeful, given how the listings of its two competitors in the sector have turned out.
But much of Zepto’s fundraising success in the private market has been driven by a glowing narrative woven around its founders. The public markets may not be so easily dazzled, especially given the company’s actual financials. After all, Zepto’s losses declined by just 2% in FY24 to Rs 1,249 crore.
“Public market analysts are brutal. They analyse every line item in the financials. Zepto’s narrative of being run by two Stanford dropouts is a good story, but does quick-commerce business have the ability to give returns?”
Analyst quoted in “Zepto is a quick-commerce bronze medallist acting like a gold medallist”, June 2024, The Ken
My colleague Aakriti Bhalla’s story from the middle of last year dives into many of those challenges, and is excellent reading if you are interested in getting a sense of where things stand for the company. The same goes for a more recent Two by Two podcast if you’re a fan of the audio format.
Zepto is a quick-commerce bronze medallist acting like a gold medallist
We need to have a chat about Zepto
Ather Energy
Ather recently received Sebi’s approval for an IPO. Given that it is a pioneer in the electric two-wheeler segment, there is significant interest in its listing. However, the stock of rival Ola Electric, which rushed for an IPO in August 2024, has struggled to maintain its value. After climbing by more than 20% immediately after its listing, the share price has tapered and is now trading at roughly the same level as its Rs 76 listing price.
And this despite Ola Electric choosing to price its IPO quite a bit lower than expected.
Most of Ather’s sales—close to 70%—come from south India, while its rivals sell most of their units in the north. But Ather’s real advantage lies in the fact that it chose a service-first strategy rather than prioritising sales like Ola Electric.
My colleagues have published several detailed pieces on both Ather and other E2W brands in the recent months.
Ather Energy was a pioneer. Can it also be a leader?
The real reason behind Ola Electric slashing its IPO valuation in a booming stock market
Ola chose selling over servicing EVs. Bajaj, Ather disagree
LG India
The Indian arm of LG Electronics, the South Korean electronics giant, aims to list on the Indian market and raise Rs 15,000 crore via a public offer this year. One reason is the “Korean discount”—where companies listed in the South Korean bourses are priced significantly lower than they might be in India.
It will, however, need to watch out for the reef that Hyundai hit.
Our stories on Hyundai India’s listing and how it was derailed could provide insight on how LG India’s listing may play out.
Hyundai India’s IPO pays its Korean parent way more than meets the eye
How Rajkot derailed Hyundai’s $3 billion IPO
Physics Wallah
Unlike the three companies mentioned above, Physics Wallah doesn’t have many good parallels.
The company, which is reportedly eyeing a US$500 million IPO at a valuation of US$5 billion, will be India’s first edtech venture to hit the stock markets. No mean feat when other big names in the segment have seen their fortunes dwindle rather alarmingly. In fact, Physics Wallah raised US$210 million in funding at a valuation of US$2.8 billion last September.
Perhaps some of its success is due to being a relative latecomer to the edtech boom, giving it the benefit of hindsight that many older edtechs lacked.
“The advantage is that PW doesn’t have to choose between an online and offline model. Post-Covid, the hybrid model is more acceptable than it was earlier. Older edtechs felt like they had to choose between one or the other, and the whole thesis of growth was to shun the offline-centre model since it was slow to grow. In PW’s era, everything is possible—study free courses online, attend a class in person, solve doubts by asking a bot.”
“Physics Wallah raises money. What’s next?”, September 2024, The Ken
Boat
Wearables is another sector that has been in a bad spot recently—the number of shipments in the smartwatch segment, for instance, have nearly halved within the span of a year.
And yet, Boat, which first filed its draft prospectus in 2022, seems determined to go for an IPO in the next few quarters, despite losing ground in both the earwear and smartwatch segments earlier last year. An interesting choice for a company that had shelved its IPO plans in 2022 because market conditions weren’t favourable.
Our coverage from the last few months tells us much about the company’s current state.
Boat, Noise unleashed cheap smartwatches on India. Rivals hurt them with dirt-cheap ones
Wearables brand Boat’s impressive run was too good to last
Of course, these aren’t the only companies heading for the markets this year; subsidiaries of a few heavyweights are also expected to gain their own ticker codes in 2025. HDB Financials, a subsidiary of HDFC Bank, has already filed its draft papers, while Tata Capital and Reliance Jio are reportedly candidates too. Other notables include NSDL; JSW Cements; the National Stock Exchange (NSE), which first filed its DRHP in 2016; Groww, which is considering a US$600–800 million IPO; and Indira IVF, which is eyeing a US$400 million IPO.
In all, at least 32 companies have already secured market regulator Sebi’s nod for an IPO so far. Going by the mood now, the IPO frenzy could take a breather. How each company fares, though, will depend a lot on their individual strengths and weaknesses.
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Rahul leads the promotion and distribution efforts for the journalism produced by The Ken. He works at the intersection of the publication's editorial and business operations.
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