New Delhi
Nearly 43 per cent of pre-IPO investors in new-age companies over the past five years earned returns above benchmark levels, according to wealth management firm Client Associates (CA). Alpha, the measure of such outperformance, was positive for 9 of 21 firms studied.
The report analysed 25 companies in fintech, logistics, consumer internet, quick commerce, and SaaS that went public during this period. It found 52 per cent of them delivered positive alpha at the six-month lock-in expiry — the best exit window for many.
Average IPO subscription reached 48.5 times, and 68 per cent of these IPOs offered listing gains averaging 24.15 per cent. However, only 36 per cent sustained long-term outperformance, showing that early gains often faded.
The past five years saw a surge of tech-driven companies entering markets, boosted by digital adoption, demographics, and capital inflows. This shift moved the IPO scene away from its traditional industrial and BFSI focus. Liquidity, retail speculation, and hype-driven investing often outweighed business fundamentals.
Top performers like Ixigo and Zaggle delivered alpha of 89.29 per cent and 62.47 per cent, while others, such as Ola Electric, lost significant value — down 60.13 per cent. Companies with clear monetisation models, such as Zomato and Nazara, outperformed more capital-heavy ventures.
Post-IPO investors fared worst, with only 32 per cent of firms delivering positive alpha. For them, IPO prices often marked peak valuations rather than the start of sustained growth.
CA’s Nitin Aggarwal noted that while risk-takers gained from listing pops, long-term rewards favoured firms built on strong fundamentals.
