MUMBAI: A boom in technology initial public offerings (IPOs) in India risks grinding to a halt after several of the country’s highest-profile startups tanked soon after listing.

       A raft of prominent tech startups, including Oyo Hotels and logistics provider Delhivery, are pushing back their public debuts and preparing to reappraise target valuations, according to sources.

       The duo, backed by SoftBank Group Corp, had been among the country’s highly anticipated offerings.

       India’s burgeoning startup ecosystem faces a reckoning just weeks after it closed out a record year for IPOs.

       Investors have soured on new tech offerings after the calamitous public debut of financial technology (fintech) firm Paytm, as well as the battering received by newly listed e-commerce operators Zomato Ltd and Nykaa.

       Regulators have stepped up scrutiny of IPO candidates after investors got burned, contributing to the delays.

       “Investors are no longer enamored of the household name startups; they want a path to profitability and returns, not hype and hoopla,” said Anup Jain, a managing partner at early-stage investor Orios Venture Partners.

       An Oyo spokesman said by e-mail that it is standard procedure for the regulator to ask for clarifications of a preliminary IPO filing, adding “our bankers are actively engaged with them. We can’t comment on specifics.” Delhivery declined to respond.

       The owners of Delhivery have pushed back its US$1bil (RM4.18bil) IPO to the fiscal year starting in April, said sources.

       Delhivery is also reviewing its listing plan after the stock market regulator frowned on a planned sale of a substantial amount of shares by investors in the IPO, the sources said. The logistics startup, backed by Carlyle Group Inc as well as SoftBank, had previously planned to list by March.

       Oyo, which came under scrutiny for its ownership structure and heavy losses after filing preliminary IPO documents last year, is now facing regulatory questions too.

       India’s watchdog has made queries about Oyo’s ongoing litigation with hostel operator Zostel Hospitality Pvt, which is claiming a stake in the company after a failed merger in 2016. The approval for the draft prospectus of Oyo’s planned US$1.2bil (RM5.02bil) IPO has been pending for almost five months.

       Its investors include Sequoia Capital and Lightspeed Venture Partners, as well as SoftBank.

       The management and bankers of Oyo, formally called Oravel Stays Ltd, are not in a rush, however, said a source.

       They are taking their time to respond to the regulator’s queries to slow down the listing process on purpose, the source said.

       Also up in the air are the IPO timings of Pharmeasy, which goes by API Holdings Ltd, and automobile marketplace Droom Technology Ltd, which filed initial IPO documents in November.

       Pharmeasy’s investors include Prosus Ventures and TPG, while Droom is backed by Beenext and Lightbox Ventures.

       Spokespeople for Pharmeasy and Droom declined to comment.

       India’s first-ever tech IPO rush marked a monumental year of exits for global investors in 2021.

       Paytm’s parent company, One 97 Communications Ltd, raised a record US$2.5bil (RM10.46bil) when it went public in November. But its shares have plummeted 60% from their IPO price, infuriating investors and fuelling concerns among regulators. A broader decline in tech stocks in India and beyond has only added to the gloom.

       Even the United States IPOs of startups Druva Inc, InMobi Pte and Pine Labs Pvt have been put off or deferred to the second half of 2022 or later.

       Sunnyvale, California-based software-as-a-service provider Druva, Singapore-based mobile solutions startup InMobi and fintech Pine Labs were all founded in India, where they still have the bulk of their operations.

       A Druva spokesperson said by email that “the company will continue to monitor market and industry conditions and will do what best positions Druva for future growth and success.”

       InMobi and Pine Labs did not respond to requests for comment.

       Hanging over the Indian listings is a big unknown: the fate of the massive public share sale of state-owned Life Insurance Corp of India, which filed its draft prospectus over the weekend. The final valuation and investor interest in what’s being called the “mother of all Indian IPOs” could dictate the course of technology companies’ listing plans, sources said. — Bloomberg