India IPO stakes monitored as $14 billion lockups end by Warren Buffett and Masayoshi Son
- ByStartupStory | November 8, 2022
As lock-up periods on Rs 1.15 trillion worth of shares sold in initial public offers (IPOs) expire this month, giving billionaire investors like Warren Buffett and Masayoshi Son the opportunity to sell, India’s budding technology sector will be put to the test.
For four consumer-focused tech stocks that have all fallen in price recently, lock-ups expire in November. These companies include FSN E-Commerce Ventures, owner of the beauty e-retailer Nykaa, and One 97 Communications, operator of the payments provider Paytm. While the expanding group of retail investors has shown great interest in high-profile tech IPOs, market experts have been less enthusiastic.
Tom Masi and Nuno Fernandes, co-portfolio managers of GW&K Investment Management LLC, stated in an email that “investors have gotten more demanding when it comes to expectations of future profitability from these businesses.”
The market for first-time share sales in the nation had a boom in 2021, raising a record $18 billion in revenue in the midst of strong demand for digital products in the slow initial stages of reopening after the epidemic. Due to rising rates, falling tech stock values, and concerns about a recession, overall offerings have slowed this year.
Paytm, one of the most recent tech startups has suffered the worst losses; it is currently down 70% since its IPO, which was supported by numerous international investors, including Jack Ma’s Ant Group, Berkshire Hathaway, SoftBank Group, and Son’s SoftBank Group. After November 15, when around $4.3 billion worth of shares is unlocked, the stock may come under further pressure.
Since Softbank was an early investor (in Paytm, Delhivery, and PolicyBazaar owner PB Fintech), “there is a possibility that it could take some profit,” said Brian Freitas, an analyst who writes for Smartkarma. To finance its ongoing multibillion-dollar share buybacks, Softbank has been selling down shares in ventures, he continued.
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