Only 1 in 3 New-Age IPOs Beat Market: A Comprehensive Study

A detailed five-year analysis of 25 venture capital and private equity-backed new-age companies that went public in India between May 2020 and June 2025 has unveiled a startling truth: sustained market outperformance is rare. According to a whitepaper by wealth management firm Client Associates, merely 36% of IPO investors managed to generate positive alpha over the BSE 500.

Key Findings: The success rate was slightly lower for post-IPO investors at 32%, while pre-IPO investors fared better with a 43% outperformance rate. Despite heavy oversubscription and significant first-day listing gains, many companies failed to maintain their initial momentum.

Performance Highlights

Companies like Zomato, Nazara Technologies, and Ixigo stood out by consistently outperforming the market. However, others experienced sharp declines post-listing. The study also highlighted that pre-IPO investors achieved the best risk-adjusted returns by exiting at the six-month lock-in expiry.

Investor Advice: The report recommends selective exposure to high-quality listed new-age companies, tactical IPO participation for listing gains, and avoiding the hype of the retail-driven unlisted market. It also suggests using professional fund managers for private market allocations.

Market Trends

The initial exuberance of the 2020-2021 phase, characterized by abundant liquidity and growth-focused narratives, has transitioned into a more disciplined market in 2024-2025. Profitability, cash flow generation, and capital efficiency have become key benchmarks for investors.

"India's startup IPO boom was driven more by narrative than numbers. Our analysis shows that while listing gains rewarded early risk-takers, sustained outperformance was reserved for companies built on solid fundamentals, not hype," said Nitin Aggarwal, Director of Investment Research and Advisory at Client Associates.