Digital Business IPOs: Opportunity Or Bottomless Pit?

Zomato’s listing was a watershed moment in the Indian stock market as it is the first large listed pure-play internet company. The stock has almost doubled from its IPO price. Post Zomato’s success, there are many large internet companies looking to list on the bourses. The likes of Nykaa have already completed their IPOs. Others like Delhivery have filed their papers for an IPO. However, with these businesses being loss-making, the market is divided. Some market participants are comparing the popularity of these IPOs with the internet boom and bust of 2000 when the stocks fell significantly. They argue that these companies have no profits to latch on to when the stocks start falling. However, the bullish side believes that like in the US and China, these companies can become the biggest value creators over time. Interest in these stocks is, to a large extent, driven by the...