Nowadays the IPO is full of IPOs in the stock market. Every day a new IPO comes and its listing is bang in the beginning. But after a few days, those shares start declining. A report has revealed the flop game of this IPO, which describes how many top IPOs destroyed the expectations of investors. In the last few years, many new age companies made a strong entry in the Indian stock market, but according to a recent report, their brightness could not last long. The report of the Multi Family Office Client Associates states that out of the new age companies listed between May 2020 and June 2025, only 36% of the new age companies were able to give positive alpha in the long period, that is, they performed better than the BSE 500 index. Apart from this, all the rest have wasted the money of investors.
6 out of 10 disappointed investors
The recent study of Multifamily Office Client Associates revealed that most of the 25 new-edged IPO companies listed between 2020 and 2025 did not meet the expectations of investors. According to the report, only 36 percent of companies were able to give satisfactory returns to investors for a long time. That is, about 6 out of 10 companies proved to be disappointment for investors. The report also revealed that six months after the IPO, the lock-in expiry period proved to be the best. By this period, about 52 percent of the companies were on positive returns. At the same time, only 43 percent of those investing in the pre-IPO round were in profit, which suggests that pre-IPO investment could not show risky and shiny performance of every company.
Investors’ tension increased in the long run
The new IPO companies launched between 2020 and 2025 were bang. The report of Client Associates states that these IPOS got an average of 48.5 times subscription, meaning so much crowd to buy shares that the price kept climbing throughout the day. About 68% of IPOS showed up to about 24% on the first day, which increased the enthusiasm of early investors. But this glow could not last long. In the long race, only 36% of the companies were such that they were able to give good returns to investors. The condition worsened after the listing. It is clear in the report that some companies were able to perform properly even after the listing. Many times the price of IPO proved to be the highest price of the company and after that the shares fell. The report also checked 10 IPO companies with retail french, especially in which names like Zomato, Policy Market and Ixigo were good. But big names like Paytm, Ola Electric and Mobikwik disappointed investors. In these 10 IPOs, pre-IPO investors suffered an average loss of 5%, while IPO and Post-IPO investors suffered a loss of up to 6% and 25% respectively.
The report of Client Associates says that the companies that had a clean and right money-making business model were able to benefit investors in a long time. Meaning, those whose profits were increasing and their business could be big, they remained. Especially capital-light companies such as Zomato and Darsara have faced the ups and downs of the market in a better way. At the same time, companies which were expensive, had more problems. The report states that when a lot of money and retail investors came to the market in 2020-21, the prices of IPO had increased a lot, but now that round is over. In 2024-25, the market is now focused on profits, cash flows and correct governance.