IPO Market Forecasts

I've been noticing many recent IPOs continue running up for 2-3 days after listing. While demand and supply factors (limited free float) are obvious reasons, there may also be technical factors at play. Let me explain the technical factor. Many traders attempt to short these stocks intraday, expecting a fall, but if the stock hits the upper circuit, they get trapped with no buyers to sell to. This leads to what’s called a short delivery. When this happens, the exchange conducts an auction the next day between 2:30 PM and 3:00 PM to settle the trade. These auctions can happen at a significant premium to the market price. For instance, today Meesho's auction price was ₹258, while the market price at the time was around ₹226. By the way, if you hold these stocks in your demat, you can actually offer your shares directly during this auction window. It’s a great way to exit at a potentially higher price while also helping the exchange settle the trade. We've enabled this on Zerodha—you can participate directly from your holdings. More details in the article in the comments.

Are Startup IPOs Truly Creating Wealth—or Just Exit Liquidity for Founders and VCs? India has seen a wave of startup IPOs over the last three years - 23 companies went public, promising innovation, disruption, and wealth creation. But have they truly delivered for investors? Let’s get into the numbers. The Reality Check Winners: Only 7 out of 23 IPOs are trading above their listing price—with an average return of +69%. Compare that to the midcap index, which posted +78% over the same period. Losers: 16 startups have lost value, with an average return of -35%. Meanwhile RIL, the largest large cap, delivered +14% in the same period. The biggest winner? Zaggle (+163%) The biggest loser? IdeaForge (-67%) What’s the reason for heavy losses? Lets cut through the noise and look at a few key examples: 🚨 Paytm (-60%): Three months after its IPO, Paytm hit a massive roadblock when the RBI barred it from onboarding new customers over persistent KYC and compliance issues. While insiders like Vijay have their stock vesting tied to hitting certain valuation milestones, these regulatory setbacks have clearly dented investor confidence. 🚨 Nykaa (-50%): Influenced by heavyweights like KKR, Nykaa listed at a $7bn valuation - 6X of its GMV. Yet, despite all that hype, its annual profit has never surpassed FY21 number of ₹61 Cr. The disconnect between valuation and fundamentals is real. 🚨 Ola Electric (-35%): Ola Electric is wrestling with multiple challenges: mounting customer complaints, leadership exits (yes, both the CMO and CTO have resigned), and a shrinking market share. When rapid scaling meets operational chaos, big ambitions get hit hard. Why Is This Happening in India? 📉Valuation Discipline missing: Startups are going public on sky-high revenue or GMV multiples without a solid path to profitability to back them up. Eventually markets correct this valuation.  📊 Regulatory Uncertainty: India’s regulatory framework is still catching up in sectors like fintech, gig work, and emerging tech, adding extra volatility. 👥 Investor Sentiment: Indian retail investors have little patience for high-risk, unprofitable businesses, which need time and money to stabilise. A little speculation --> A lot of price movement. What Needs to Change? ✅ Founders’ Mindset: Instead of obsessing over “Can we IPO?”, ask yourself, “Should we IPO?” Build sustainable businesses with strong governance systems with a long term view. 🔎 Stronger Governance: Founders should invest in good legal counsel, a solid Chief of Staff, and an independent board that isn’t afraid to call out red flags. 📜 Tighter Regulatory Oversight: Investment banks and SEBI must enforce stricter IPO pricing and disclosure standards to protect retail investors. Final Thoughts At the end of the day, an IPO isn’t just an exit—it’s a transition into long-term public accountability. The harsh reality? Hype fades, but solid fundamentals and hard numbers endure.

We’re about to witness three of the largest IPOs in history. SpaceX is targeting $1.5t. OpenAI aims for $1t. Anthropic is valued at $380b. Combined, $2.9t in market cap. The scale is unprecedented. But the real problem isn’t the market cap. It’s the float. Typical IPOs offer 15-25% of their shares to public markets. This creates enough liquidity for price discovery while allowing founders & early investors to maintain control. Facebook floated 15%. Google floated 19%. Alibaba floated 15%. At a 15% float, here’s what these three IPOs would require : (first image) At standard float percentages, these three companies would need to raise $432-576b from public markets in a single quarter. From 2016 to 2025, the entire US IPO market raised $469b. It’s like throwing a boulder into a pond. Standard floats are impossible, so these companies will debut with tiny ones, likely 3-8%. But that creates a different problem. The S&P 500 requires 50% public float for inclusion. At 3-8%, none qualify initially. When they do, the disruption begins. SpaceX at $1.6-2t would challenge Meta for spot #6, potentially slotting in behind Amazon. When they qualify, passive funds managing $20t must buy. Index funds can’t raise cash. They sell existing holdings. The mechanics become self-reinforcing. Index funds sell existing mega-caps to buy new entrants. Lower mega-cap prices trigger momentum strategies to sell further. Additional selling creates more pressure on the very stocks index funds track. These companies have challenged every assumption within their core markets. Now their IPOs will challenge every assumption about public financial markets.

This is Wang Xingxing with his very first robot dog models in 2017. 🤓 Fast forward 8 years, and his company Unitree Robotics sets sights on $7B IPO valuation. 🤖 Here's how Unitree cracked the robotics code: China's industrial robot production jumped 35.6% YoY, hitting 369,316 units in H1 2025. But while giants like Boston Dynamics chase perfection, Unitree chose a different path: affordability. The breakthrough moment came from constraints, not resources. 👇 Wang Xingxing bootstrapped from his university lab in 2016. Laikago, Unitree’s first quadruped robot (2017), laid the foundation for its humanoid breakthroughs, which has taught him something crucial: expensive doesn't mean better. 🤖 The G1 humanoid costs under US $16,000. That's cheaper than many laptops, and far below competitor prices. But how do you maintain quality at that price point? Wang's three-part strategy: 1️⃣First, end-to-end integration. Instead of buying expensive components, Unitree builds everything in-house. Motors, sensors, AI chips. This vertical approach cuts costs while maintaining control. 2️⃣Second, measured scaling. While competitors raised massive funding rounds, Wang took eight smaller ones. No vanity metrics, no premature expansion. Focus on getting the fundamentals right. 3️⃣Third, cultural resonance first. The H1 humanoid captivated over a billion viewers at the 2025 Spring Festival Gala. Domestic success before global expansion. And here's what really sets Unitree apart: ✔️ Open-source philosophy meets viral marketing. Their robots dance, do backflips, and navigate stairs. These demos generate millions of views without massive ad spending. ✔️ Unitree’s innovations, like the G1’s affordability, earned global recognition at events like the 2025 World Robot Conference, beating 780 applicants worldwide 👇 The business model is fascinating. Unitree scaled from niche sales in 2024 to mass production in 2025, achieving a billion-dollar valuation through strategic funding. 🤔 How? ✔️ They're not selling robots; they're selling the future of "embodied intelligence." By 2035, the humanoid market is projected to reach $38–43 billion, with Unitree positioning itself as the affordable gateway. 🚀Wang's leadership philosophy drives everything: "Passion-driven iteration beats endless funding." His team prioritizes breakthrough moments over incremental improvements. While Boston Dynamics perfects warehouse automation, Unitree democratizes robotics for manufacturing, search-rescue, and entertainment. 🌎 The IPO horizon signals global ambitions. Unitree is eyeing global expansion, with plans to scale production and distribution worldwide. ❓The question becomes: can established players adapt to this affordable revolution? Wang's journey proved that innovation leadership doesn't always require the biggest budget. Sometimes constraints force breakthrough thinking that resources can't buy. Your take? 🤓👇

India's IPO landscape just flipped the script: Industrials and consumer businesses now lead deal volumes while traditional powerhouses like fintech and IT take a backseat with fewer but bigger bets. According to Business Standard's latest report (link in comments) citing Prime Infobase data on India's 2025 IPO market trends, we're witnessing the most diverse sectoral mix in years. ↳ Stats that demand attention • Industrial sector leads with 9 IPOs (₹5,262 cr) vs 22 deals (₹21,019 cr) in 2024 • Consumer discretionary close second with 7 IPOs (₹13,226 cr) • Financial services dropped to just 1 deal but valued at ₹12,500 cr (vs 13 deals in 2023) • Healthcare maintains steady momentum: 17 firms raised ₹26,672 cr over 3 years • 70+ companies with SEBI approval targeting ₹1.2 trillion, another 90 awaiting clearance worth ₹1.4 trillion ↳ Three insights reshaping the industry • Market maturity is driving sectoral diversification Investors are now embracing sectors that previously faced resistance, moving beyond the safe bets of fintech and IT to back industrial and consumer plays. • Capital allocation is becoming more strategic Financial sector IPOs are shifting from lending-heavy models to capital-market-focused companies, reflecting changing market dynamics and risk appetites. • Growth trajectory trumps sectoral preferences Companies with clear growth stories can access public markets regardless of sector headwinds, as evidenced by the pipeline spanning agriculture to solar energy. ↳ My perspective after 20+ years Having witnessed the evolution from traditional financial institutions to digital-first platforms over 20+ years, here's what's really driving this surge: • Regulatory confidence: SEBI's streamlined processes and predictable timelines are encouraging diverse sectors to go public • Digital infrastructure maturity: UPI, digital KYC, and fintech rails have made it easier for traditional businesses to demonstrate scalable growth models • Investor sophistication: Public market investors now better understand business models beyond traditional tech, creating appetite for industrial and consumer stories ↳ Strategic questions for the ecosystem: • Which sectors do you think will dominate IPO volumes in 2026? • And for fintech leaders: How are you positioning your companies to support this diversifying IPO ecosystem through embedded finance solutions?

SpaceX’s listing is kicking off a mammoth cycle for IPOs. Other AI leaders will follow, seeking to raise an estimated USD 215 billion in markets which are already at record highs. A tipping point? Enthusiasm is understandable because AI is fundamentally reshaping economies. It’s also a regime change for the tech sector. Focus will now shift from storytelling to spreadsheets as investors move from narratives to price discovery. We will now have the tools to measure revenues, leverage, free cash flows, and customer concentration risks. We will learn which business models will deliver consistent returns and where value is being created. But we will also see more market volatility, pressure on existing tech leaders, and a need to manage rising dependence on AI-driven names that have dominated returns so far. This IPO cycle marks the next phase in financial and technological evolution, and is already reshaping markets. Some index rules are bending, passive flows are being redirected, and concentration risks are intensifying. The impact on portfolio diversification is hard to overstate. History tells us that investing in IPOs usually disappoints over the long term, with the average newly listed US firm trailing the market over its first three years, especially during periods of peak enthusiasm. Early trading grabs headlines, but the average investor often pays a higher price for shares and inherits weaker performance over time. Diversification remains the most effective tool for investors, yet it can no longer be assumed – it must be carefully built. With Clément Dumur, I explore these shifts and investment risks in the new chapter of our ‘Intelligent Allocator’ series. Don’t miss it – and watch out for the elephants in the index.

What do Mega IPOs mean for markets? In this week's episode of Power and Consequences, Gary Gensler and I discuss the significance of the current wave of very large initial public offerings: SpaceX recently; and potentially upcoming from Anthropic and OpenAI. These companies have already raised large amounts of capital through private offerings and are now turning to public markets. If their recent private market valuations and the experience of SpaceX are any guide, their public market capitalizations (value of shares outstanding) will be among the largest in the world. In part, this ability to issue capital reflects well on the functioning of US capital markets. The US share of global equity outstanding (over 50%) is well in excess of our share of global GDP (less than 25%). But is there something else going on? History tells us that enthusiastic investment cycles and financial markets’ FOMO for general purpose tech generally leads to over-investment followed by market and economic reckonings. US market and economic growth have been highly dependent on the outsized funding of AI infrastructure investment. Might this be what we’re currently experiencing in the US? Are the Mega IPOs a potential ‘tell’ of what comes next? Listen to the episode here: https://lnkd.in/eFH54uk7

Been looking at the data and performance of all VC backed startups which has gone public in the last 4 years It is quite evident that The companies which have consistently performed well post listing are the ones - Very transparent reporting on all key operational metrics ( not just financial metrics) , and clear guidance on how these metrics will move - very strong say vs do ratio. Consistently delivering on the operational metrics I also think that public markets will reward more transparent reporting of numbers and operational metrics over combined metrics ( purely my hypothesis) Eg: if a company is selling fans, geysers, coolers, mixers etc If they report each business separately with key metrics and their movements, they might be looked at more positively than a business which combines all of them

Can SpaceX beat the post-pandemic IPO curse? IPOs historically underperform similar non-IPO stocks in their first year of issuance, but the struggle has been particularly persistent and severe in recent years.  On average, stock prices of IPOs from 1980-2024 “popped” 19% on their first day, and rose 5.6% over the subsequent 12 months.  Over the same window, the broad market (represented by the Russell 3000) returned an average annual 11.5% and comparable size-matched firms returned roughly 11%, so IPOs underperformed both the market and similar non-IPO stocks by several percentage points in their first year, historically. However, performance varies significantly by year, and even by decade. IPO performance was strong in the mid-1980s and 1990s, and in most years during those decades, stocks on average rose in the year after their first day of trading on the public equity market.  Performance since the tech bubble burst has been more inconsistent, and particularly poor as of late. Periods of market stress such as the 2000 dot-com peak and the 2008 Great Financial Crisis accompanied significant declines in IPO share prices in their first year. The 2021–2024 stretch following the SPAC-dominated IPO glut just after the pandemic has been particularly poor. IPOs on average posted negative performance every year since 2021 in the worst stretch on record for new issue performance. HB Wealth Matthew Sanders Michael Casper, CFA