Pre-IPO, IPO returns: How 25 new-age stocks fared against market benchmarks

Client Associates, a private wealth management firm, has released an analysis of 25 venture capital and private equity-backed firms that went public between May 2020 and June 2025. The study revealed a dichotomy between market hype and fundamental performance.

The study categorised investors into Pre-IPO, IPO, and Post-IPO groups, benchmarking against the BSE 500 index. The analysis provided insights into varied investment outcomes across these categories, offering a look at the performance of new-age ventures in the stock market.

The findings reveal a dichotomy between market hype and fundamental performance. Although companies saw listing gains due to high oversubscription rates, long-term value creation was elusive for most. Positive alpha over the benchmark was generated by 43% of Pre-IPO investors, 36% of IPO investors, and only 32% of post-IPO investors. These statistics underscore the challenges faced by investors in navigating the volatile landscape of new-age IPOs.

Companies with clear profitability paths, revenue scaling, and margin improvements significantly outperformed their peers. In contrast, cash-burning entities lacking viable profitability trajectories experienced substantial value loss post-listing. This highlights the critical importance of a sustainable business model in ensuring long-term success in the public markets.

The study highlights that while new-age IPOs created excitement and short-term gains, risk-adjusted returns for retail investors in the unlisted market remain questionable compared to diversified fund-based approaches or established alternatives. This raises important considerations for investors seeking stable returns in a rapidly changing market environment.

India's startup ecosystem has transformed over the past decade, becoming a dynamic venture capital destination. Favourable demographics, digital adoption, and capital inflows have led to the emergence of unicorns and public market candidates.

Between 2020 and 2025, a wave of new-age companies transitioned to public markets, altering India's IPO landscape. These businesses, often asset-light and rapidly scaling, differed from traditional industrial and financial services IPOs.

Pandemic-driven liquidity, increased retail investor participation, and speculative market behaviour created a complex environment where fundamentals often took a backseat to market sentiment and growth narratives. This environment posed unique challenges and opportunities for investors and companies alike.

The study employs a comprehensive analytical framework to assess investment performances across entry points and sectors, including fintech, e-commerce, logistics, travel technology, and quick commerce. This framework provides a nuanced understanding of the factors driving success in these diverse sectors.