Over half of start-up listings from 2025 now in red
What's the story
A year after a wave of venture-backed start-ups flocked to Dalal Street, many of their stocks are now trading below their issue price. A Moneycontrol analysis reveals that eight out of the 15 new-age tech companies that went public through initial publicofferings (IPOs) in 2025 are trading below their issue price. The trend is attributed to market volatility, aggressive IPO pricing, and a reassessment of growth and profitability expectations after these companies began reporting quarterly results.
External factors
War in West Asia impacting investor sentiment
Market volatility, especially due to the ongoing war in West Asia, has been a major factor behind the recent underperformance of newly listed stocks. Deepak Shenoy, founder of Capitalmind, an investment advisory firm, said that the war in West Asia has taken everything down. He added that newly listed companies tend to react more sharply in such environments and venture capital lock-ins could also start putting pressure on these stocks.
Investor sentiment
Conflict affecting investor appetite for tech listings
The ongoing conflict is also impacting investor appetite for technology listings. As Moneycontrol reported, the escalating tensions have affected IPO plans of several late-stage start-ups, with companies preparing for lower valuations or delays in their listing timelines. Global investors have also become cautious as sovereign wealth funds from West Asia—an important source of capital for Indian start-ups—may prioritize regional deployments amid the conflict, potentially slowing flows into technology companies.
Market correction
Broader reset after IPO frenzy
The correction in start-up stocks also reflects a broader reset after a period of strong investor appetite for IPOs. Over the past two years, India's IPO market has seen a surge in venture-backed companies going public as late-stage private funding tightened and investors chased high-growth technology stories. Shriram Subramanian, founder and MD of advisory firm InGovern, said "There has been a sense of mania in the last couple of years in India."
Financial transparency
Start-ups post-IPO: The reality check
Another factor under investor scrutiny is how companies perform after they start reporting results as public entities. Start-ups often try to show better financials before their IPO, especially with investors looking for clearer paths to profitability. Subramanian said "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."
Market dynamics
Sorting process in public markets
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. Deepak Padaki, president at Catamaran, said both founders and investors are still adapting to the growing number of venture-backed companies entering public markets.