Zetwerk IPO Raises ₹5,012 Crore with 3.1x Subscription Rate
Zetwerk's IPO sees significant gains for early investors, with a total raise of ₹5,012 crore and a subscription rate of 3.1 times.
Zetwerk's IPO consists of a fresh issue of ₹2,830 crore and an offer-for-sale of ₹2,182 crore.
Peak XV Partners marks its 30th public listing with this IPO, achieving substantial returns for its investors.
The IPO was oversubscribed primarily by institutional investors, while retail participation lagged.
Zetwerk Manufacturing Businesses successfully launched its initial public offering (IPO) on October 23, raising ₹5,012 crore. The IPO includes a fresh issue of ₹2,830 crore and an offer-for-sale (OFS) of ₹2,182 crore. Shares debuted at ₹159, reflecting a 5% premium over the issue price of ₹151, although they later experienced a decline of over 20% during the trading session. The overall subscription rate reached 3.1 times, driven mainly by institutional demand, while retail interest was notably lower.
The IPO's structure has positioned early investors, including venture capital firms like Kae Capital, Accel, and Peak XV Partners, to gain significantly. Kae Capital and its affiliate, Kalysta Capital, are expected to realize around ₹1,215 crore from their share sales, with Kae Capital Fund II set to gain approximately ₹190 crore, translating to returns of about 38.3 times its initial investment. Accel India V, which acquired shares at ₹7.84 each, is projected to earn around ₹181 crore, yielding returns of approximately 19.3 times its acquisition cost.
This IPO marks a milestone for Peak XV Partners, representing their 30th portfolio company to go public. The firm has a diverse portfolio that includes significant past exits such as Zomato and Nykaa. The funds associated with Peak XV are expected to generate around ₹353 crore from the OFS, with substantial gross gains anticipated. The firm’s strategic investments in various sectors have solidified its presence in the public market.
In addition to institutional investors, Zetwerk's co-founders are also participating in the IPO, each offering around 1.42 crore shares, potentially raising ₹215 crore at the issue price. However, the promoter group entity, Creovate Innovation Private Limited, is selling shares at a loss compared to its acquisition cost. The IPO is designed to provide liquidity to existing shareholders while allowing them to maintain their stake in the company's future growth.
Looking ahead, Zetwerk aims to leverage the funds raised through the IPO to enhance its manufacturing technology platform, which connects industrial customers with suppliers. The company seeks to streamline sourcing, production, and supply chain management, positioning itself for further growth in the competitive market landscape.
