Study Finds Most New-Age IPOs Fail to Deliver Long-Term Gains
The report analysed investor outcomes across three key entry points — pre-IPO, IPO, and post-IPO — using the BSE 500 as a benchmark
Mumbai: A majority of new-age companies that set the primary market buzzing with their initial public offerings and listing day gains have failed as long-term wealth creators for IPO and post-IPO investors, according to a study tracking 25 such firms listed between May 2020 and June 2025 across fintech, logistics, consumer internet, quick commerce, and SaaS (Software as a Service).
Only 36 per cent of IPO investors and 32 per cent of post-IPO investors generated positive alpha despite strong listing-day pops, the study by Client Associates, a multi-family office, revealed.
The report analysed investor outcomes across three key entry points — pre-IPO, IPO, and post-IPO — using the BSE 500 as a benchmark.
“Between 2020 and 2025, a surge of tech-led companies, fuelled by digital adoption, favourable demographics, and strong capital inflows, entered public markets, shifting the IPO landscape away from its traditional industrial and BFSI roots. However, this transition coincided with unprecedented liquidity, speculative retail participation, and a narrative-driven investing cycle, where business fundamentals were often sidelined,” the study noted.
It observed underperformance in the so-called “retail frenzy subset” — 10 IPOs that attracted high retail interest in the unlisted or secondary market. While companies like Zomato, PolicyBazaar, and Ixigo emerged as consistent performers, others such as Paytm, Ola Electric, and Mobikwik significantly under-delivered.
Pre-IPO investors witnessed highly polarised results — with Ixigo and Zaggle generating exceptional alpha of +89.29 per cent and +62.47 per cent respectively, while Ola Electric saw value erosion of -60.13 per cent. As of June 16, 2025, only 9 out of 21 companies (43 per cent) yielded positive alpha for this cohort.
For IPO investors, average subscription stood at 48.5 times, with 68 per cent (17 out of 25) delivering listing gains averaging 24.15 per cent. However, these gains were short-lived, with only 36 per cent of IPOs delivering long-term outperformance.
Post-IPO investors were the most disadvantaged group, with merely 8 out of 25 companies (32 per cent) generating positive alpha. The study found that the listing price often reflected a valuation peak, rather than the beginning of sustained growth.
Companies with clear paths to profitability, margin improvement, and revenue scaling — such as Zomato, Nazara, and Ixigo — consistently outperformed their peers, while cash-burning businesses without viable economic models suffered significant post-listing value erosion.
As of June 16, 2025, the proportion of companies outperforming the BSE 500 stood at 43 per cent for pre-IPO investors, 36 per cent for IPO investors, and 32 per cent for post-IPO investors.