Startup IPO reality check: 8 of 15 listings from 2025 now trade below issue price

Startup IPO reality check: 8 of 15 new-age listings from 2025 now trade below issue price

• 8 of 15 tech IPOs in 2025 now trade below their issue price
• West Asia conflict and market volatility hit investor sentiment
• Upcoming IPOs may be delayed and valued lower amid uncertainty

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A year after a wave of venture-backed startups rushed to Dalal Street, a significant number of those stocks are now trading below their issue price.

A Moneycontrol analysis shows that eight of the 15 new-age tech companies that went public through initial public offerings (IPOs) in 2025 are trading below their issue price, a trend industry experts attribute to market volatility, aggressive IPO pricing and a reassessment of growth and profitability expectations once these companies began reporting quarterly results.

Only a few companies, including Lenskart, Groww, Meesho, and Ather Energy continue to trade above their listing price.

However, the upside for some of these stocks has been limited. Companies such as Urban Company, BlueStone and Zappfresh are trading only marginally above their issue price, indicating muted post-listing gains for a part of the cohort.

West Asia tensions hit investor sentiment

Market volatility triggered by the escalating war in West Asia has emerged as one of the biggest factors behind the recent weakness in newly listed stocks.

“The war in West Asia has taken everything down. So to that extent, these stocks are also down. Newly listed companies tend to react more sharply in such environments, and as venture capital lock-ins open after a few months, that can also start putting pressure on these stocks. We saw the same pattern with startups that listed earlier as well,” said Deepak Shenoy, founder of investment advisory firm Capitalmind.

The conflict is also beginning to affect investor appetite for technology listings. As Moneycontrol reported, escalating tensions in the region have weighed on IPO plans of several late-stage startups, with companies bracing for reduced valuations or delays to their listing timelines.

Global investors have also turned cautious as sovereign wealth funds from the West Asia — an important source of capital for Indian startups — may prioritise regional deployments amid the conflict, potentially slowing flows into technology companies.

Aggressive IPO pricing catching up

Experts say the correction also reflects a broader reset after a period of strong investor appetite for IPOs.

Over the past two years, India’s IPO market saw a surge in venture-backed companies going public as late-stage private funding tightened and investors chased high-growth technology stories.

“There has been a sense of mania in the last couple of years in India. It takes two hands to create those valuations — on one side investment bankers pricing IPOs very aggressively and on the other side investors expecting quick gains of 20 or 50 percent,” said Shriram Subramanian, founder and managing director of advisory firm InGovern.

As Moneycontrol reported, 15 new-age tech and consumer internet companies went public in 2025, raising close to Rs 40,000 crore, more than 35 percent higher than the roughly Rs 29,000 crore mobilised from 13 such IPOs in the previous year.

IPO narratives vs post-listing performance

Another factor investors are watching closely is how companies perform once they begin reporting results as public entities.

Startups often attempt to present stronger financial metrics ahead of their IPO, particularly as investors demand clearer paths to profitability.

Several IPO-bound startups tightened costs and accelerated efforts to turn profitable before listing as investor scrutiny intensified.

Subramanian said the real picture often becomes visible only after listing.

“What companies do is dress up the financials before the IPO. But once the company starts operating normally after listing, the reality becomes clearer and the numbers start showing up,” he said.

Markets separating stronger companies

Despite the broader decline, analysts say the divergence in stock performance also reflects a natural sorting process in public markets.

Companies that continue to demonstrate strong operating performance and market share gains are better positioned to retain investor confidence.

“Good companies will continue to do well. In times like this, the best companies get separated from the not-so-best, and quality assets will always attract the right capital,” Sekhar Garisa, managing director at Claypond Capital, said at the Moneycontrol Global Wealth Summit 2026 on March 14.

Deepak Padaki, president at Catamaran, said both founders and investors are still adapting to the growing number of venture-backed companies entering public markets.

“Companies coming from the VC-backed ecosystem and going public is still a relatively new trend, so both investors and public markets are evolving and learning,” he said at the summit. “The advice we give founders is — don’t dress it up for an IPO. The market will recognise that in two quarters, and then you’ll have a problem.”

IPO pipeline faces uncertainty

The recent correction in startup IPO stocks could also affect the next wave of listings.

More than 20 startups are preparing to go public in 2026, including companies such as PhonePe, Flipkart, and Zepto, along with boAt, Shadowfax and Infra.Market.

However, market volatility and geopolitical tensions have already prompted some late-stage startups to reconsider timelines as they weigh the risk of lower valuations.

“If the market is depressed, you definitely don’t want to jump in and do IPOs. Even companies that were planning listings will wait if the market environment is weak,” said Deepak Shenoy of Capitalmind.

At the same time, some companies are continuing with listing preparations despite the turbulence. Moneycontrol has reported that companies such as Zepto and PhonePe have continued IPO roadshows even as markets turned volatile amid the West Asia conflict.

With investors becoming more selective, analysts say the next phase of India’s startup IPO cycle could see a sharper focus on profitability, operating metrics and sustainable growth before companies are able to command premium valuations in the public markets.