A white paper by wealth management firm Client Associates has shed light on how early investors in India’s new-age technology companies have fared since their stock market debuts. Analysing 25 tech-driven firms listed since 2021, the study concluded that pre-IPO investors typically achieved better risk-adjusted returns by exiting their positions at the six-month lock-in expiry rather than staying invested over several years.

The findings reveal a split between companies that initially captured strong retail interest and those whose business models triggered early market scepticism. For example, beauty and fashion platform Nykaa soared by an astonishing 320 percent at the lock-in expiry, while flexible workspace provider Awfis Space Solutions rose 174 percent and gaming firm Nazara Technologies jumped 140 percent. However, such high-flying performances were rare.

On the other end of the spectrum, high-profile listings such as Paytm and CarTrade saw their share prices plunge by more than 60 percent within six months of debut. Ola Electric and Mobikwik also witnessed significant declines of around 30 percent during the same period. Overall, only 11 of the 21 companies analysed delivered positive alpha at the lock-in expiry.

The long-term picture is more sobering. From their issue prices to mid-2025, only nine of the 25 companies studied managed to outperform the BSE 500 index. Ola Electric now trades nearly 39 percent below its issue price, FirstCry is down by about 19 percent, Yatra by 22 percent, and Nykaa has seen most of its earlier gains eroded, sitting only around 4 percent above its listing price.

According to the report, the wave of tech IPOs between 2020 and 2025 was fuelled by rapid digital adoption, favourable demographics, and strong inflows of venture and private equity capital. However, this boom coincided with a period of abundant liquidity, speculative retail buying, and narratives that often overshadowed business fundamentals. As a result, several companies entered the market at valuations that proved unsustainable once the initial hype faded.

The lesson for investors is clear. While the excitement surrounding new listings can deliver remarkable short-term windfalls, identifying sustainable winners requires a deeper look at fundamentals, market positioning, and long-term profitability. The study also suggests that disciplined exit strategies, especially around lock-in expiry, can significantly improve returns for early backers.

 

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