Startups such as Swiggy, FirstCry, and Ola Electric, which launched some of the largest IPOs among startups in FY25, have significantly underperformed the Nifty, recording sharp declines. While the NSE Nifty 50 recorded modest gains of 5.34% in FY25, shares of Swiggy, FirstCry, and Ola Electric have fallen between 15% and 30% from their issue price.
In contrast, startups with relatively smaller issue sizes have outperformed the index. Managed workspace provider Awfis is up 73% since its listing in May, digital trucking platform BlackBuck has gained 55% since its IPO in November, and travel platform Ixigo has risen 52% since June.
However, over the past six months, a broader market selloff has pushed most recently listed startup stocks into the red. While the Nifty declined 8.8% since October, Ola Electric fell 47%, FirstCry dropped 43.3%, Unicommerce slipped 43.8%, and Swiggy lost 28%. Ixigo (-7.4%) and Awfis (-5.07%) fared relatively better.
“Despite strong listings, the market ultimately values earnings and sustainable growth, leading to corrections in high-valuation stocks,” said Ishan Tanna, Equity Research Analyst at Ashika Institutional Equity.
He added that investor sentiment has turned cautious now, and they are reassessing these startups’ profitability potential in a challenging market environment, which has resulted in sharp post-listing declines across the board.
This marks a stark contrast to last year, when investor confidence in new-age tech IPOs was high. In 2024, at least 13 such companies debuted on the bourses, collectively raising over Rs 29,000 crore. While venture funding recovered slowly from the slump, late-stage startups turned to public markets to raise capital.
MobiKwik’s IPO was a prime example of this enthusiasm, noted Tanna. The issue was oversubscribed nearly 120 times and soared 86% on its market debut. Likewise, Unicommerce’s IPO saw overwhelming demand, with subscriptions reaching 168.39 times, he said.
Encouraged by last year’s successful startup IPOs, several startups plan to go public this year, including Ather Energy, Bluestone, Ecom Express, and IndiQube. Despite recent market volatility, analysts expect another dynamic year for India’s IPO market, driven by a strong pipeline and growing retail participation.
In a recent report, strategy consulting firm Redseer noted that new-age companies are expected to play a crucial role in India’s IPO boom. Currently, there are about 30 listed new-age companies with a market cap of less than $110 billion.
By 2030, the market cap of new-age companies is expected to reach $1 trillion, driven by the growing pool of IPO-ready companies, a robust regulatory environment, and continuous domestic investment flows, it said.