Have India’s Startup IPOs Been More Hype Than Wealth Creation?

The past half-decade in India’s equity markets has witnessed a boom in initial public offerings (IPOs) that blur the boundary between genuine public market success and sheer hype. 

Recent performances indicate that startup founders and investors tout public listings as validation moments: an opportunity to demonstrate scale, unit economics, and long-term profitability.

Yet, once these companies hit Dalal Street, the reality often diverges from private market optimism. Some tech and new-age listings have delivered strong performance; others have languished. Meanwhile, a quieter cohort of non-startup, traditional IPOs has delivered consistent investor returns.

The Startup IPO Wave

The year 2025 marked a resurgence in startup IPO activity after years of muted capital markets. As many as 39 startups went public in 2025, up about 60 per cent year-on-year from 2024, signalling a reopening of public markets to new-age companies across consumer internet, fintech, SaaS, and EV sectors. Collectively, companies like Lenskart, Meesho, and Groww raised close to INR 41,000 crore, signalling both investor appetite and high-volume of capital being deployed into exciting-new listings. 

However, the sheer number of listings does not automatically translate into sustained shareholder value.

Highs and Lows: Performance After Listing

Some companies, like Zomato, that got listed in 2021, have been standout performers. Zomato’s shares, which were priced at INR 76, have risen roughly 187 per cent post-listing, trading near INR 218 in early 2025. Likewise, Zaggle has delivered over 110 per cent returns from its IPO issue price. 

But several high-profile tech listings have disappointed. Paytm, long hailed as India’s premier digital finance story, got listed at a discount and subsequently saw its share price fall sharply, trading about 65 per cent below its offer price in later sessions. Delhivery, another logistics-ecosystem listing, lost over 40 per cent of its value since going public. Swiggy, while listing positively in late 2024, has struggled to maintain gains amid weak broader market sentiment and investor concerns about unit economics.

This mix highlights that not all tech startups are created equal from an investor-returns perspective. High early growth in private markets does not guarantee sustained public valuation.

Sunder Iyer, Partner at Deloitte India, said, according to an earlier Outlook report, that only a small fraction of the now-public startups are trading above their listing price.

“What this indicates is a clear shift away from frothy valuations toward fundamentals. The frothy valuations seen in private markets are not translating into long-term public market success unless companies demonstrate sustainable business models. Founders and investors must focus less on timing the peak and more on building durable profitability,” said Iyer.

The Pipeline: Zepto and Flipkart

Two of the most discussed and popular IPOs in 2026 are Zepto and Flipkart.

Zepto, the quick-commerce unicorn whose revenue reportedly climbed over 150 per cent year-on-year to INR 11,110 crore in FY25, filed its draft papers confidentially with SEBI for an IPO that could exceed USD 1.3 billion. 

For Zepto, however, profitability remains elusive: net losses persist, and cash burn has been a recurring issue. For public market investors, it is important to see clearer unit economics and a demonstrable path to sustainable earnings.

Flipkart, India’s homegrown e-commerce pioneer and Walmart-backed giant, sits on a USD 70 billion-plus valuation and is expected to be among the largest IPOs India has ever seen. Unlike Zepto, Flipkart’s narrative centers on both scale and a slow shift toward profitability, having been one of the few Indian tech platforms to see significant monetisation over the years.

Its success or failure on the public market will be an example for how deeply institutional and retail investors are willing to commit to large tech stories.

“As we approach 2026, the foundations for a broader reopening are strengthening. Companies that prioritize IPO readiness and act with agility will be ready to seize opportunities as they arise,” said Karim Anani, EY Global IPO Leader. 

Silent Successes: Traditional and Core IPOs

Numerous traditionally, structurally bootstrapped and profitable companies, in contrast to the headline-grabbing tech start-up debuts, have delivered reliable investor returns, with far less noise. 

Recent offerings such as Highway Infrastructure Ltd. delivered up to 75 per cent returns within hours of listing, and smaller companies like Shyam Dhani Industries doubled on their first trading day based on strong subscription numbers and fundamentals.

Smaller caps and SME IPOs have also shown that valuation discipline and clear business models tend to translate into consistent investor value, a stark contrast to some tech names that posted wide losses after debut.

Most notably, mid-tier companies like Indigo Paints, not a startup, delivered significant listing gains in their debut year, with shares surging more than 75 per cent above the issue price in early 2021 and offering long-term returns.

In 2025, data from the NSE and BSE show that while the number of IPOs rose, median listing gains fell sharply to just 3.8, down from double-digit figures in prior years. 59 per cent of IPOs were trading below their listing price as of year-end 2025, leaving only 41 per cent above that mark.

Beyond the Hype

According to an EY report, India remained the world’s most active listing destination by deal count in 2025, registering a record 367 IPOs and raising USD 22.9 billion, underpinned by deep domestic investor participation and a strong flow of SME listings. 

Indian tech startups have undeniably reshaped public market dynamics, bringing hustle and new-age innovation to investor interest in previous cycles. Strong performers like Zomato and Meesho have demonstrated that for businesses with stable unit economics, public markets can be rewarding.

But the broader data suggest a different reality: not all tech IPOs attract long-lasting public-market success. This always contrasts with quieter traditional companies that deliver measured but reliable shareholder value. Ultimately, for a public investor, profitability, unit economics, and valuation discipline overrule hype narratives.