The world was already advancing in technologies, and amid these slow advancements, the Pandemic caused havoc. The Pandemic switched everything to digital. Even those who were not accustomed to technologies had to learn it by hook or crook.
The apps, such as zoom, Google meet, etc., have gained so much popularity in 2020. We can see how technology is changing rapidly; almost every day, alternative technologies surpass each other, and regular updates and advancements have been quite normal. Online entertainment has gained immense popularity as well. People engage themselves in e-sports and other online entertainment.
From their home, people could use their mobile phones for almost anything starting from shopping, studying, playing games, and many more.
The Initial Public Offering allows companies to raise capital from public investors. Public investors can also participate in this. If the company profits in the future, then the ones who have the shares can profit. E.g., the zoom wasn’t profiting much before the Pandemic, but during the Pandemic, it was so popular that over 500M downloads have been done from the Google play store. So those who had a share in this app benefited positively and are still helping.
Seeing the rise of zoom, many developers started making other apps for meeting purposes or entertainment purposes.
Some benefits of the IPO are:
- Fundraising: the initial offering from people can be used in the construction of new buildings, hiring of employees, reducing debt, and many more
- Capital’s reduced overall cost: once a company is public, it can raise additional Capital through offerings on the stock exchange.
- Exit opportunities
- Increased public awareness about a particular company
And the benefits of IPO investing are:
- Meet long-term goals: it has the potential to bring big returns in the long term.
- Indian stock market generated almost $11 billion through IPO, and the market is growing.
- Price Transparency: The price will be mentioned, so even if you are not a big investor, it will be mentioned clearly
- Buy cheap, earn big: The IPO price is usually low. A small company that is growing will distribute its stock at low prices, and in turn, if it grows in the future, you will highly profit. The companies which produce will also charge a lot more for the IPO, so it is a good idea to invest in stocks.
But just know that some IPO can be heavily in the loss as well, it is because:
- Questionable Fundamentals: if a company floats an IPO without being transparent and clear about its goals, then there is a chance of failure
- Market Timing: Sometimes, when the market slows down, the investors come up not knowing the decreases of that company in the global market
- Valuation: if the valuation is not fair, retail and institutional investors will bear the maximum risk
- X factor: There would be other reasons why an IPO will fail. Therefore it is not guaranteed that the IPO will succeed.
Nobody had foreseen the Pandemic, many potential companies had fallen, and also there was the unexpected rise of some companies. E.g., Zoom, which was mentioned earlier.
Nazara Technologies’ Kicking off
Nazara Technologies Ltd is a cricket games developer company. Billionaire Rakesh Jhunjhunwala owns the company. The company became the first Indian gaming technology company to find a market debut as mobile entertainment lift-off across the world’s No.2 smartphone arena.
The global boom in smartphone gaming, which occurred even before the Pandemic, benefitted Nazara. This smartphone gaming connected millions of people online. The Nazara firm increased in the most unexpected time, which profited the investors and shareholders highly. And due to this Pandemic, it boosted readily. Nitish Mittersian, founded in 2000, started the company borrowing 30 million from his friends and family. It got derailed, and the firm had spent its first decade in clearing the debts, but gradually the market share was built by acquiring fellow gaming startups.
Founder of Amazon.com Inc., Jeff Bezos, has said that ‘the 21st century is going to be the Indian century”. The Nazara firm is aiming to be the first prominent startup.
Nykaa E-Retail, backed by TPG, is planning an IPO soon as it could value India retailer’s online cosmetics at more than $3 billion. Food delivery startup Zomato Pvt. He has said it would file for an IPO in the first half of 2021.
Companies like Facebook Inc and Alphabet Inc.’s Google are investing billions into partnerships with local operator Jio Platforms Inc..,
Everything is shifting to digital, and people are focusing more on improving their startups digitally. On top of that, the smartphones, which cost much less and cut-price Wi-Fi knowledge charges for 1.3 people, have increased Nazara and its friends’ development. The firm is active in e-sports, whereas commanding a share of the cell cricket gaming section with titles like World Cricket Championship. Nazara plans to provide up to 4.96 million equity shares for sales at face value of 4 rupees each, as shown by the filing.
As you read it, one cannot predict the downfall or increases of a particular company. But you have to look at the risk factors before investing and thoroughly studying it. Investing hugely in a company should be done with precaution and just in case be ready mentally for the company’s downfall. But if it skyrockets, then you will profit greatly.