The debut of Tracxn Technologies – parent company of software as a service (SaaS) based platform Tracxn – on the stock exchanges was a tame affair with the shares listing at Rs 84.5, a premium of 5.63% from the Rs 80 issue price the National Stock Exchange (NSE).
Analysts were concerned about the high valuations of the initial public offering (IPO), below-record subscription numbers and the fact that the offering was an offer to sell (OFS) only.
The difference between an IPO and OFS is simple. A company raises fresh funds from the primary market through an IPO, while there is no new fundraising in an OFS as existing shareholders dilute their stake through the primary market and keep the money raised.
As it was an OFS, the amount received – Rs 309.38 crore – will go to the selling shareholders (promoters and investors). While Flipkart founders Sachin Bansal and Binny Bansal left the company, Abhishek Goyal and Neha Singh’s promoter ownership fell below 35% following the issuance.
The IPO was open for subscription between October 10th and 12th. The company sold 38,672,208 shares through OFS route in the range of Rs 75-80 per share.
The company’s performance
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The company’s extensive global database and its custom solutions and features enable its customers to find and track companies across industries and geographies. It has emerged as one of the most prominent players in the private market data service provider space.
For the 2021 financial year, the company had a total turnover of Rs.55.74 crore compared to Rs.63.13 crore in the previous year.
It had posted a loss of Rs.4.8 crore in FY22 versus a loss of Rs.5.3 crore in FY21 and a loss of Rs.5.4 crore in FY20.
Challenging IPO market
The overall IPO market – both domestic and global – has been in the doldrums since the beginning of the year, reversing last year’s trend when there was an IPO boom. Numerous startups, including Zomato, Nykaa and Paytm, jumped on the bandwagon last year to try their luck in the primary market.
Nykaa had a blockbuster market listing, but Paytm and Zomato had disappointing debuts. In fact, both have seen significant shareholder wealth erosion over the past six to nine months.
Companies are putting their IPO plans on hold as market sentiment has become volatile amid global macroeconomic headwinds, record-high inflation rates and the escalating war between Russia and Ukraine. Investors have become nervous and cautious with their bets, looking for quick profitability rather than risk-taking.
In such a scenario, Tracxn’s public listing is expected to bring some joy to retail investors.
The steady listing could also lead to a resurgence in IPOs in the second half of the financial year as data from Prime Database suggests 71 companies have proposed raising around Rs 1,05,000 crore and approval from the Securities and Exchange Board of India have received (Sebi) continue.
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