By Erick What’s common between Jio, Oyo and boAt?
They are massive tech companies that are about to have their initial public offerings (IPO) within the next six months.
Very recently, Urban Company and DevX had their IPO massively oversubscribed. It means many things, not the least of which is that public interest in being a shareholder of such companies is high.
Finance bros will tell you better, but here are some basic reasons why tech companies – even ones as big as Jio – are heading towards their IPO:
- Access to large-scale funding: raising capital without debt
- Brand visibility
- Liquidity to early investors and employees
- Attracting talent through stock-based incentives (and retaining talent)
- Facilitating mergers and acquisitions (public companies can use their listed shares as acquisition currency and participate more actively in M&A deals)
- Paying off debt
- Global expansion and partnerships (being a listed company somehow enhances credibility)
- Market feedback (transparent valuation for the company)
There’s also a bit of legacy building.