Adtech firm Amagi Labs, logistics platform Shadowfax, analytics company Fractal, customer engagement firm Capillary Technologies, and payments company Pine Labs are among those that recalibrated their IPO size or valuations during their public market debut. Bankers and investors said these adjustments reflect a more conservative stance among public market investors, who are placing greater emphasis on profitability, operating leverage, and cash flow visibility.
The recalibration is occurring even as India’s IPO market remains active. ET had reported in January that new-age companies are looking to collectively access public markets for capital worth around Rs 50,000 crore in 2026, compared to Rs 35,000 crore last year.
However, weaker market conditions and heightened selectivity among institutional investors are prompting issuers to price more cautiously to secure demand and ensure stable post-listing performance.
Market participants expect the pricing conservatism seen so far to influence larger upcoming offerings.
A late-stage investor who backs several pre-IPO companies said recent listings will serve as reference points for institutional investors evaluating future deals. He said there could be a ripple effect on large IPOs such as PhonePe, Zepto, Oyo, and Infra.Market, with greater scrutiny on cash flow, margin profiles, and competitive positioning.
“Apart from looking at each IPO on its own merits, public market investors will also typically benchmark it against what has listed in the last 12-18 months… how those companies were priced, how they were traded, and whether their earnings trajectory held up. If recent issues have come at lower multiples, then that becomes the reference point for the next set of large offerings,” he said.
Founders who have recently listed acknowledge that even conservative pricing does not fully insulate an IPO from the broader market sentiment.
“What tends to happen is that even if you price the IPO cautiously and the response is still lukewarm, anchor investors and mutual funds push harder (for a lower pricing),” said a founder of a recently listed new-age company. “You always want to leave some upside on the table for incoming investors, but at the same time you risk getting clubbed with the broader sentiment around tech and startup stocks, which is not always in your control.”
Fractal Analytics is a case in point. Ahead of its IPO earlier this month, cofounder and group CEO Srikanth Velamakanni told ET in an interview that public market investors assess artificial intelligence firms differently from specialised private investors who track the theme closely and spend significant time understanding the category. Fractal priced its IPO at a 26% discount to its last private valuation.
Velamakanni said that educating Indian public market participants about how AI companies differ from traditional technology services firms would take time.
Getting more selective
Dealmakers said that investors are applying frameworks typically used for scaled consumer and services businesses.
“Growth still gets rewarded, but only when there is clear evidence of scale economics, operating leverage, and a credible route to sustained cash generation,” said Gaurav Sood, managing director and head of equity capital markets at Avendus Capital. “That framework can imply lower valuations than late-stage private rounds that were done in a different liquidity and risk environment.”
He added that the shift has led to more conservative pricing in cases where profitability metrics are still evolving.
“When profitability is still emerging or unit economics are being proven, investors want a wider margin of safety. So, issuers often choose to price conservatively to ensure a clean book, build long-term credibility, and support aftermarket performance,” he said.
Aakash Agrawal, head-digital and new age business at Anand Rathi Investment Banking, said the pricing reset is not confined to startups.
He said that given the current market environment, the trend is visible across companies that have gone public recently, not just technology-led businesses, largely because broader market conditions have been soft.
Over time, both bankers and founders have gained a clearer understanding of how to approach IPO pricing, he said.
A similar trend has also played out in mutual funds, that have increased exposure to new-age stocks focussing more on market leaders in the belief that companies with a higher market share will grow at a higher pace and command a larger share of their sub-segment’s profit pool.
ET had reported on February 10 that mutual funds held shares worth Rs 1.77 lakh crore in about two dozen new-age companies at the end of 2025, nearly double the Rs 95,000 crore held a year earlier.
“There is also more differentiation within “new-age” now. Investors are selective about quality, category leadership, and earnings visibility. When multiple offerings compete for the same pool of capital, that selectivity shows up sharply in day-one price discovery,” Sood said.