IPO Investment Factors

"Once a company is public, only numbers matter." Really? I keep hearing this – and I respectfully disagree. Yes, numbers gain importance after an IPO. But storytelling doesn’t stop. It just evolves. Institutional investors don’t just buy KPIs. They buy a vision. A market narrative. A founder’s credibility. Retail investors? Even more so. No story, no excitement. No excitement, no demand. Tesla, Nvidia, Amazon — these weren’t “just numbers” plays. Their stories created belief. Belief created momentum. An IPO isn’t the end of storytelling. It’s just a new audience. Great public companies know this. The rest? Just become charts.

A year ago, the loudest voices in AI told every executive the same thing: act now or your company won't survive. Dario Amodei, CEO of Anthropic, said AI would eliminate 50% of all white-collar jobs within five years. Sam Altman of OpenAI said entire job categories would be totally, completely gone. And it worked exactly as designed. When CEOs make those kinds of predictions publicly, every CIO, CHRO, CFO, and board member hears the same alarm go off simultaneously. Fear doesn't just inform decisions, it short-circuits them. Nobody negotiates when they think they're already behind. Contracts got signed, budgets moved fast, and that urgency turned into revenue, which turned into valuation. Anthropic went from $9 billion to $30 billion in months. OpenAI hit $852 billion. Together, the doom narrative helped produce somewhere between one and two trillion dollars in private market valuation. Then this week, both Altman and Amodei started sounding noticeably more optimistic. Altman said he's "delighted to be wrong." Amodei now says automation may actually expand the work people do. Not because the technology changed, but because the audience did. You can't take a company public by telling pension funds, mutual funds, and retail investors that your product will destabilize society. So the narrative flipped. Doom got them the valuation. Optimism sells the IPO. The truth is, neither story was told to help you make better decisions about your workforce or your career. Both were told to serve a financial outcome at the right moment. So which narrative has been quietly shaping your AI strategy, and does your answer to that change anything? I've put 3 questions every leader should sit with before their next AI decision on the last slide. Swipe through and let me know your honest take.

India’s IPO Market: Hot, Yes. Euphoric? No. There has been a lot of social media noise lately — every high-valuation IPO gets instantly labelled “overpriced,” “bubble,” or “crazy PE exit.” And somewhere in that cacophony, the actual fundamentals of the companies and it's prospects get dismissed. But markets don’t work on social media narratives. They work on data, discipline, and buyer responsibility. 1. High Fundraising ≠ Market Euphoria India is heading towards a record fundraising year, with ~USD 17.5 bn raised YTD vs ~USD 17 bn last year. Historically, when fundraising shoots up to 3–4% of market cap, markets have entered overheated territory. Today, we are still below 2%, even if the entire IPO pipeline materialises. There's enough headroom. It’s enthusiasm — not excess. 2. Valuation Controversy Does Not = Poor Company Quality Social media often conflates two very different things: Valuation vs Business Quality Yes, some IPOs come at ambitious pricing. PE funds and promoters will push hard for lofty exits but that's not a reflection on business quality. Companies should be judged by their execution, governance, and runway — not by noise around their pricing. 3. Domestic MFs/AIF's Have Been the Valuation Gatekeepers Promoters/PEs have had to cut prices, alter sizes, or change structures. Listing have been mixed. Several deals saw flat listings despite heavy subscription while several others saw pop despite high valuations. This is not FOMO behaviour. This is constructive price discovery. 4. The Quality of IPOs has been very good Unlike earlier cycles, the current pipeline is rich with: Profitable businesses, Market leaders, High ROCE/ROE companies, Structural beneficiaries of mobility, formalisation, financialisation, energy transition, and digitisation. Certainly far better than 2007–08 and 2017–18. 5. If You Find an IPO Expensive, Simply Don’t Buy Buyer beware. Not buyer outrage. Every investor has the choice to walk away. If a valuation feels stretched — skip the IPO. There is no reward for shouting about it on social media. Don’t participate in every IPO. Be selective. Be choosy. But let’s not ignore the other side: many high-quality companies have come through the IPO route and gone on to create extraordinary wealth. Yes, survivorship bias exists — but that’s the game. Your job is to identify the wealth creator not play listing pop. IPO might not be great entry point, you may get a better entry point a few quarters later or not. But if you dismiss the entire IPO market, you risk missing out on excellent franchises. Conclusion: A Rational Market, Not a Reckless One Despite high deal flow, headline valuations, and global attention, India’s IPO market today is: Disciplined, Price-discerning Supported by strong and demanding domestic institutions, Filled with fundamentally solid companies. This is not euphoria. This is what a maturing, deepening capital market looks like. #IPO #IndianIPOmarket

In the last two years, India saw one of the biggest startup IPO waves in its history. 31 #startups listed. Only 12 are above their IPO price today. That means most companies became more valuable privately… and less valuable once the public started evaluating them. That means 61% destroyed public market value after all the hype, headlines, and billion-dollar narratives. This is not a #funding problem. This is a #fundamentals problem. - Companies with real profits, strong customer retention, and capital discipline are compounding. - Companies built on TAM slides, discount-driven growth, and storytelling are struggling the moment public markets start asking real questions. Take Zomato. It wasn’t the obvious winner at IPO. Losses were high, sentiment was mixed. But the company did the hard things post-listing - improved contribution margins, exited weak verticals, and built real operating leverage. Or Groww. No excessive burn. No expansion for the sake of optics. Just a focused product, strong customer trust, and clean economics. PB FINTECH LIMITED (Policybazaar.com) did the same. Insurance is a tough business, but they built renewal-driven recurring revenue. The ones that cratered? They were selling narratives. EV revolution. India's D2C tech brand. AI-powered everything. Retail investors bought the story. The early backers booked their exits. The stock did the rest. 64% of all IPO money raised in FY25 came via OFS - existing shareholders cashing out, not companies raising growth capital. We need to be honest with ourselves about what that means. I'm not saying don't IPO. I'm saying don't IPO before you've earned it. #Founders should rather obsess over their NPS, repeat rates, cash burn per unit. That's what survives a market cycle. "We're disrupting a $100B market" does not. The customer has always been king. The market just took 18 months to remind everyone.

A few years ago, most IPO conversations revolved around TAM, revenue growth, and “path to profitability.” Today, I’m hearing a very different question from serious investors: “𝐇𝐨𝐰 𝐜𝐥𝐞𝐚𝐧 𝐢𝐬 𝐭𝐡𝐞 𝐠𝐨𝐯𝐞𝐫𝐧𝐚𝐧𝐜𝐞?” Because in India’s 2025 IPO cycle, governance is becoming 𝐚𝐥𝐩𝐡𝐚. If we look at recent listings, the ones with stronger disclosures, cleaner promoter histories, and tighter audit practices are seeing healthier subscription patterns and far more stable post-listing performance. Meanwhile, companies with glamorous narratives but weak governance signals (related-party transactions, aggressive accounting) are getting punished long before the bell rings. Because investors finally have alternatives and information. With 𝟐𝟎 𝐜𝐫𝐨𝐫𝐞+ 𝐝𝐞𝐦𝐚𝐭 𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐬 and SIP inflows hitting record levels, retail participation has matured. Domestic institutions are demanding discipline. Global investors are pricing governance premium into their models. And SEBI’s tighter scrutiny has shifted the market from “trust us” to “show us.” The new reality: 1. Good governance reduces valuation friction 2. Strong audit quality lowers long-term volatility 3. Clean promoter track is a must 4. Transparent disclosures build credibility In an era of abundant capital and abundant noise, governance has become the ultimate differentiator. The story may sell the IPO but governance sustains the valuation. #CorporateGovernance #IPOIndia #CapitalMarkets #InvestorConfidence #FinancialTransparency #IndianMarkets

What if the real IPO you’re buying isn’t the company but the story? Some listings rise because the business is strong. Some rise because the narrative is stronger. And most investors don’t realise which one they’re holding until it’s too late. Let me put it simply: -> There’s what the company says. -> There’s what the company sells. -> And then there’s what the numbers can actually support. This edition of 64ᵗʰ edition WBF goes into that uncomfortable gap, the one where: • burn looks like growth, • funding looks like strength, & • storytelling looks like scale. But the twist here is that: I’m not decoding the noise. I’m decoding the difference. (the quiet line between narratives that sprint & businesses that walk.) And somewhere inside that line is the only filter that protects real money. If you’ve ever wondered: -> Am I buying the business or -> Am I just buying the belief? Then this 64ᵗʰ edition of WBF edition will help you see it clearly. Open the full edition, where I break down the lens that separates a good story from a scalable company. #IPO #StoryVsScale #wealthbeyondfinance

🚨 𝐎𝐅𝐒-𝐡𝐞𝐚𝐯𝐲 𝐈𝐏𝐎𝐬: 𝐏𝐮𝐛𝐥𝐢𝐜 𝐦𝐚𝐫𝐤𝐞𝐭𝐬 𝐚𝐫𝐞 𝐛𝐞𝐢𝐧𝐠 𝐮𝐬𝐞𝐝 𝐚𝐬 𝐝𝐮𝐦𝐩𝐢𝐧𝐠 𝐠𝐫𝐨𝐮𝐧𝐝𝐬 𝐟𝐨𝐫 𝐩𝐫𝐨𝐦𝐨𝐭𝐞𝐫 𝐞𝐱𝐢𝐭𝐬? Kumar Shankar Roy ✍and I dive deeper into IPO data from the last five years to see how OFS-heavy listings have fared post-listing. It reveals a stark reality and poses a real question: if promoters and PE funds are rushing to sell, why is the public rushing to buy? Over the last five years, India saw around 300 IPOs with an Offer-for-Sale (OFS) component. Tellingly, 68 of these were fully OFS issues. This means not a single rupee of the ₹1.76 lakh crore raised went into expanding capacity, funding growth, reducing debt, or building the business. The sole objective was monetisation. Today, the numbers are not flattering. These 68 fully OFS IPOs debuted with a combined market capitalisation of about ₹16.88 lakh crore on listing day (closing). By April 2, that figure had fallen to roughly ₹15.93 lakh crore — a destruction of around ₹95,000 crore in investor wealth. Over 60% of these stocks now trade below their listing price, exposing the illusion of “growth stories” sold at peak valuations. What looked like opportunity was often just a well-timed exit for early investors. This is not a market anomaly; it’s a structural shift. High P/E listings, weak fundamentals, and narrative-driven hype are now being brutally repriced. Read here the full story: https://lnkd.in/g96qJ9Wu Hari Viswanath businessline

Wall Street is treating the race between Anthropic and OpenAI as more than a race to go public. The first frontier AI company to reach public markets will likely play an outsized role in defining how investors value the entire category. For the past three years, investors have largely participated in the AI boom through hyperscalers, semiconductor companies, data center operators and power providers. Anthropic and OpenAI are now competing to become the first publicly traded frontier AI company. The company that reaches public markets first will do more than raise capital. It is likely to establish many of the benchmarks investors use to evaluate the sector, including expectations around revenue growth, margins, compute efficiency and capital requirements. Public markets will begin testing assumptions about the long-term economics of frontier AI rather than relying on private-market narratives. History suggests that being first to market does not guarantee long-term leadership. It does create an opportunity to shape how investors, business leaders and the broader public think about an industry. The first frontier AI IPO may influence how markets value AI, but it will also help shape how the world understands the economics of artificial intelligence. Those perceptions tend to persist long after the opening bell. https://lnkd.in/gvAzN4Q3 #FrontierAI #Technology #CapitalMarkets

The IPO window has opened, but only selectively. Together with Rahul Baig at Wells Fargo, we hosted a discussion this week on the IPO window following the SpaceX IPO. Our discussion brought together the sell-side, exchange, and buy-side perspectives, with Jesse Chasse from Wells Fargo, Crystal Shen form NYSE, and Atish Nigam from Blackstone offering their perspectives. Many thanks as well to the guests who joined us for their excellent questions and an engaging discussion! Four observations about the IPO window today that stood out were: 1. We are in a narrative-driven market. The market is giving credibility to the narrative of category leaders such as SpaceX or Anthropic. Much like Uber and Lyft in the ride-sharing era, these companies are defining an entirely new market. Investors aren’t simply buying revenue, they’re buying the potential to shape an industry for the next decade. 2. The metrics that IPO buyers are looking for are therefore sector-specific. Where the general threshold to go public might be around $300M+ today, that bar raises or lowers depending on whether your sector is more favored (AI infrastructure and semiconductor companies) or less favored (traditional SaaS companies).    3. The “internal IPO window” matters as much as the external window. It's difficult to time the markets, but companies can focus on their readiness by building a financially predictable business. Focus on when you can reliably meet and beet your plans over the next 4~8 quarters. Only then – when you have built a reliable economic machine – are companies ready for the public markets. 4. The scale of the AI revolution is such that we could be in for 3~5 years of continued market enthusiasm for AI-era companies. One observation underlying this long-term enthusiasm: companies such as NVIDIA have strong financial performance, relatively light leverage, and valuation multiples that feel far more reasonable than we saw in prior market bubbles. This is quantitatively different than earlier tech bubbles that we have experienced, and the implication is that we could still have a long way to go here. When considering where we are in this tech cycle, one could also argue that we have already seen a different kind of bubble pop: the decline of valuation multiples for traditional SaaS businesses reflects a popping of investor expectations when it comes to revenue predictability for SaaS era incumbents that are now at risk. My biggest takeaway was that - as the saying goes - the future is already here, it’s just unevenly distributed. The market’s read of the future is what is determining not only the types of companies that can go public but also the metrics they need to achieve to do so.

🎬🎥 A Thought Provoking case about Storytelling and Marketing Storytelling is powerful. But in business, that power comes with responsibility — and timing is everything. In a surprising clash between Bollywood and the boardroom, a modest ₹65 lakh biopic recently brought a ₹3,500 crore IPO to a grinding halt. Indira IVF — one of India’s leading fertility chains — chose to spotlight its founder’s journey through film, hoping to inspire audiences and build brand goodwill just ahead of its public offering. But the script didn’t play out as planned. 🎬 The film flopped. That was unfortunate — but not the real problem. 📉 SEBI flagged the timing of the release — just days before the IPO — as a potential attempt to influence investors. The IPO was abruptly withdrawn. Years of meticulous preparation, valuation work, and investor engagement were put on pause — all because of a marketing decision wrapped in a cinematic tribute. This wasn’t just a #MarketingMisstep. It was a real-time lesson in how the medium can become the message — and when that message crosses into regulatory grey zones, even well-meaning strategies can unravel. 🧭 The takeaway? Cinema can elevate a brand — but when misjudged or mistimed, it can also derail billion-dollar ambitions. For companies looking to tell their stories, especially at critical moments like an IPO, it’s essential to collaborate with the best in their respective mediums. Align with experienced creators who understand not just storytelling — but the strategic weight of brand narratives. Done right, storytelling can build trust, widen reach, and create lasting impact. Done wrong, it can cost you everything. #CinemaMeetsCapital #IPO #SEBI #BrandStrategy #InvestorRelations #CorporateGovernance #StorytellingInBusiness #BollywoodAndBusiness