A recent study has revealed that a majority of new-age IPOs, despite their initial hype and strong listing-day performances, fail to deliver long-term gains for investors. The research tracked 25 companies across sectors like fintech, logistics, consumer internet, quick commerce, and SaaS that went public between May 2020 and June 2025. The findings paint a sobering picture of the IPO landscape, dominated by tech-led firms but littered with underperformers.
Only 36% of IPO investors and 32% of post-IPO investors saw positive returns over time, according to the study by Client Associates, a multi-family office. This suggests that the excitement around new-age listings often fades quickly, leaving many investors disappointed. The analysis used the BSE 500 as a benchmark to evaluate performance across three entry points: pre-IPO, IPO, and post-IPO.
The report highlights how the IPO market transformed during this period. A wave of digital-first companies entered public markets, driven by factors like rising digital adoption, favourable demographics, and strong capital inflows. However, this shift came with challenges, including excessive liquidity, speculative retail trading, and a tendency to prioritise hype over fundamentals.
A particularly weak spot was the ‘retail frenzy subset’—10 IPOs that drew heavy retail interest in the unlisted or secondary market. While some, like Zomato, PolicyBazaar, and Ixigo, managed to sustain momentum, others such as Paytm, Ola Electric, and Mobikwik underperformed significantly.
Pre-IPO investors had a mixed experience. While Ixigo and Zaggle delivered impressive alpha gains of 89.29% and 62.47% respectively, Ola Electric’s value dropped by 60.13%. As of June 2025, only 43% of pre-IPO investors in these companies saw positive returns.
For IPO investors, the initial excitement often didn’t last. The average subscription rate was a whopping 48.5 times, and 68% of listings delivered gains averaging 24.15% on debut. But sustaining those returns proved difficult—only 36% of these companies continued to outperform in the long run.
Post-IPO investors fared the worst, with just 32% of companies generating positive alpha. The study suggests that listing prices often represented peak valuations rather than sustainable growth potential. Businesses with clear profitability pathways—like Zomato, Nazara, and Ixigo—outperformed, while those burning cash without a solid economic model saw steep declines.
By mid-2025, the numbers told a clear story: 43% of pre-IPO investments, 36% of IPO investments, and only 32% of post-IPO investments had beaten the BSE 500. The findings raise important questions about how investors evaluate new-age IPOs and the sustainability of their business models.