[blackwasp]

The public issue of quick-service restaurant chain Burger King India was subscribed a massive 157 times on Friday, the last day of the offer.

The portion meant for qualified institutional buyers was subscribed 87 times, non-institutional investors 354 times and retail individual investors 68 times.

This makes it one of the two most successful initial public offerings (IPO) of this year. The offer by Mazagon Dock shipbuilders in October was also subscribed over 157 times.

At least 10 brokerages had recommended 'subscribe' to the issue, with a few expecting listing gains.

Despite the pandemic-driven lockdowns, this year has been good for the primary market with companies raising over Rs 25,000 crore. This is better than 2019 when 16 issues could mop up only Rs 12,362 crore. In 2018, 24 issues had raised Rs 30,959 crore.

The momentum is expected to continue with more than 30 IPOs worth over Rs 30,000 crore lined up next year. And if the government takes the financial behemoth LIC public, as it intends to, then 2021 could be a record year for IPOs as LIC will command a valuation running into trillions of rupees.

Source

[nagr22]

I am not understanding the reason for this hype! This is a time when most people are not going out to eat, economy is uncertain and stocks of a restaurant chain which is not even that popular yet is oversubscribed so much??

Inspite of reading about stock markets and investing in it since last 6 years, I still dont get how things work here!

I saw the advertisement about this IPO and gave it a pass thinking this is not the time to buy this and that it might be available for a cheaper price later. I am really shocked by this huge valuation by investors! What is the rationale for this hype? Is the spare cash lying with IT guys who are bored of working from home, the reason for all this hype in stock markets?? Is there any rationale at all??

[vinu_h]

Originally Posted by nagr22

I am not understanding the reason for this hype! This is a time when most people are not going out to eat, economy is uncertain and stocks of a restaurant chain which is not even that popular yet is oversubscribed so much??

That's the short term outlook & most restaurants are at 60-70% of pre COVID levels.

Money Control's POV - "The strong interest in the issue was owing to attractive valuations, strong brand positioning, healthy financial prospects, expected robust store expansion plans of the quick service restaurant industry in India "

My POV - Glandpharma was a BIG success and investors did not want to miss out again; a bit like the revenge shopping people did post lockdown.

[libranof1987]

Just read this today:

Walmart Inc. has hired Goldman Sachs to explore an initial share sale of its Flipkart unit in the US to raise around $10 billion, two people directly aware of the development said.

https://www.livemint.com/market/ipo/...300769974.html

[SmartCat]

Originally Posted by nagr22

I am really shocked by this huge valuation by investors!

Almost nobody looks at valuation or financials. Also, only PSU IPOs are offered at a fair price. Other promoters try to extract the maximum possible capital for the lowest equity dilution.

What is the rationale for this hype? Is the spare cash lying with IT guys who are bored of working from home, the reason for all this hype in stock markets?? Is there any rationale at all??

When it comes to IPOs, most retail investors put their money in for the likely listing gains. The instant 20 to 50% gain is an attractive proposition. However, such massive over-subscription in the institutional segment suggests that they are looking at Burger King as the "next Jubiliant Foodworks" (Domino's).

[2000rpm]

Originally Posted by nagr22

What is the rationale for this hype? Is the spare cash lying with IT guys who are bored of working from home, the reason for all this hype in stock markets?? Is there any rationale at all??

FD Rates are at 5% (with tax, 3.5%)
Gold is not expected to appreciate further
Stock market is at an all time high
Real Estate is completely stagnant

People who have surplus cash, have no where to invest with decent returns.

The stock rally is also supported because of this fact.

[wheelguy]

Delhivery to list in 6-8 months, expects to raise $500 million via IPO.

The Delhivery IPO won’t be delayed beyond March 2022, CEO Sahil Barua says, adding that the supply chain and logistics startup has substantial cash on its balance sheet.

“The company is still working out details of the issue, including its size. However, given that we already have substantial cash on our balance sheet, we expect it to be a primary issue in the $400-500 million range,” he said. “ Since we are an Indian company and have a substantial part of our business here, we will list locally.”

Source

[nitishk]

Zomato IPO opens today, thoughts guys?
Yes, no ,maybe.

They say its asking for a sharp premium while others say market is under captured.

[Ananthang]

Originally Posted by nitishk

Zomato IPO opens today, thoughts guys?
Yes, no ,maybe.

They say its asking for a sharp premium while others say market is under captured.

I am taking a skip because I don’t think both Zomato or other food delivery is that profitable. It is a convenience and side business but not there to make profits.

[speedmiester]

Originally Posted by nitishk

Zomato IPO opens today, thoughts guys?
Yes, no ,maybe.

They say its asking for a sharp premium while others say market is under captured.

All the hype is created to ensure maximum returns to the VCs who have invested in them. Also most recommendation for Zomato's IPO is for opening gains which means the short term prospect is negative.

I am skipping this for sure.

[ACe_10]

Zomato is going to be oversubscribed - if you are a retail investor, you will, at best, be entitled to 1 lot (~ 15k worth of shares). If the IPO is significantly oversubscribed, then there will be a lottery done and you may not even get that 1 lot.

So if you are looking at listing gains only, its probably not worth it. Even a 50% gain of 15k is just 7.5k.

That said, you may want to purchase shares of Zomato post listing and hold it long term if you feel like there is a great growth story here. One argument for buying Zomato shares will be that none of the VC/PE funds (except Info Edge) are exiting in this IPO - probably because they expect Zomato to grow and make larger returns at a future date. However, keep in mind that these funds have invested at a significantly lower valuation and they will still make heavy profits even if the share prices tank - the risk that they are taking is significantly lower than what you and I will take.

[casnov]

I am really not sure why there is so much hype around this IPO for a company which has made a loss of around 4000 crores in the last three years. There are so many exciting companies which are undervalued and less glamarous but making really good profits. My prediction is that it will list at least 10-20% less than the offer price.
I would ask to just stay away from it.

[fordday]

Originally Posted by casnov

There are so many exciting companies which are undervalued and less glamarous but making really good profits.

Give us some leads, sir! I am always ready to listen.

[hothatchaway]

As some members have already said, subscribe to the zomato ipo if you want to contribute to a handsome exit for the early investors, not if you value your hard-earned money.

Infact the offering has been under subscribed among the zomato employees themselves! (Source: Times of India business page)

Given the stratospheric valuations of the Indian markets, a number of startups are jumping on to the ipo bandwagon, including logistics startup delhivery.

[skchettry]

A very vital point to note here is that when the market is at its peak, there is a huge spurt of IPOs. Every company planning to list itself wants to fix the premium at the highest possible values, in fact a few points less than the benchmark PE to make it attractive to the investors. In addition, various business channels and social media handles coming up with the so called GMP (Grey Market Premium) coupled with the general euphoria and the sense of FOMO (Fear of Missing Out), lead to the huge rush into all the IPOs. No doubt most of the companies would have an excellent set of numbers for last three years to show case themselves. Not saying the companies are bad per se, there are excellent companies coming out into the market through IPOs; but the euphoria driven momentum has a huge role to play.
There could still be lots of investors who who could get great listing gains or value from long term investing, I wonder how companies like Zomato with huge losses showing up every year in an intensely competitive environment with big players lurking around, could make money for me?
And ironically, as I think it's an 'avoid' for me, I find four of the mutual funds schemes that constitute major portion of my investment portfolio, have subscribed to it. So however much I try to stay away, I would still own a part of this business. Just wondering, the lack of value that Zomato's own employees (their portion was not fully subscribed, as I understand) and myself see, has been seen as an opportunity by my esteemed Fund Managers. That's how it is for me.
The above is just my observation. I have nothing personal against Zomato nor do I intend to question the wisdom of those who have invested in it. It is just my perspective that I placed here.
Regards
Sravan