Only 36% of IPOs have delivered long-term alpha despite hype: Client Associates

In its recent report, Client Associates (CA), one of India’s leading multi-family offices managing over $7 billion in assets, revealed that only 36% of investors in new-age IPOs have managed to generate long-term alpha, despite the fanfare that accompanied their market debuts.

The analysis, covering 25 tech-led IPOs between May 2020 and June 2025, offers a sobering reality check on the much-hyped segment.

The study evaluated investor outcomes across three points of entry — pre-IPO, IPO, and post-IPO — using the BSE 500 index as a benchmark.


While IPO investors enjoyed strong initial listing gains in 68% of cases (averaging 24.15%), only about a third saw sustained outperformance over time. Post-IPO investors fared even worse, with only 32% enjoying long-term alpha, underscoring the risk of entering after the hype peaked.

Pre-IPO participants experienced highly polarised results. Standouts like Ixigo and Zaggle delivered exceptional returns of 89.29% and 62.47%, respectively, while others, such as Ola Electric, saw value erosion of over 60%.

CA noted that six-month lock-in expiries often provided the best exit opportunities, particularly for companies with clear monetisation models like Zomato and Nazara.

The report also highlighted the underperformance of the “retail frenzy” cohort — IPOs that drew heavy retail interest pre-listing. While names like Zomato and PolicyBazaar stood out, others such as Paytm and Mobikwik significantly lagged. In this group, post-IPO investors saw an average negative alpha of 25%.

Nitin Aggarwal, Director – Investment Research and Advisory at CA, summed up the findings: “India’s startup IPO boom was driven more by narrative than numbers. Sustained outperformance comes from capital-efficient growth, profitability, and business discipline — not hype.”

With liquidity-fuelled exuberance giving way to a more disciplined environment in 2024–2025, CA advises investors to focus on companies with scalable revenues, clear profitability paths, and sound governance, while avoiding retail-driven FOMO plays.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)