The Indian Initial Public Offering (IPO) market in 2025 has been characterized by enthusiastic headlines, with a significant volume of companies raising substantial capital. This activity is supported by strong domestic investor participation. However, this surface-level enthusiasm masks a critical disconnect: a growing divergence between high subscription figures and muted post-listing performance.
Several high-profile IPOs have debuted flat or even at a discount, challenging the long-held assumption of a guaranteed “listing pop”. This signals a new, more discerning phase in the market. Investors are no longer investing on brand recognition alone; they are conducting deeper due diligence into valuations, profit quality, and business model risks.
This analysis examines the major controversies and underlying issues defining the recent wave of new-age tech IPOs, focusing on Lenskart, Groww, boAt, and PhysicsWallah
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Lenskart: Scrutiny Over a ₹70,000 Crore Valuation and Profit Quality
Lenskart’s IPO was, by all subscription metrics, a resounding success. The issue was heavily oversubscribed at 28.3 times, driven by strong institutional interest. The public offering, however, brought intense scrutiny upon its ₹70,000 crore valuation.
The central controversy focused on the company’s declared FY25 net profit of ₹297 crore. Analysts and investors quickly noted that this profitability was not generated from its core business of selling eyewear. Instead, it was(https://www.goseeko.com/blog/explained-what-is-the-controversy-around-lenskart-ipo/).
This discrepancy between operational performance and reported profit triggered a collapse in market sentiment. The Grey Market Premium (GMP), an unofficial indicator of listing demand, plunged by as much as 90% from its peak. Initial forecasts of a strong debut evaporated, with the final GMP implying a muted listing gain of only 2.6% to 4%.
Groww: A Profitable Model Facing Significant Regulatory Overhang
Groww (Billionbrains Garage Ventures) presented a strong case on paper. As India’s largest stockbroker, it reported a remarkable net profit of ₹1,824 crore in FY25 and saw its IPO subscribed 17.6 times.
The primary concern, however, lies in its business model. The company’s filings revealed that 79.5% of its revenue is derived from the speculative Futures & Options (F&O) segment. This heavy dependence is a critical risk because the market regulator, SEBI, is actively implementing regulations to curb speculative retail F&O trading.
SEBI’s new measures, such as a plan to increase the minimum contract size for index derivatives, are designed to protect retail investors but could directly threaten the primary revenue stream of brokers like Groww. This regulatory overhang was priced in by the market, with Groww’s GMP cooling from an initial 17% down to a modest 5% , indicating investor concern about the sustainability of its earnings.
Narrative vs. Reality: The boAt and PhysicsWallah Case Studies
Two upcoming IPOs, boAt and PhysicsWallah, highlight a growing mismatch between compelling brand narratives and the financial realities disclosed in their filings.
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boAt (Imagine Marketing):
- The Narrative: boAt has built a powerful brand as a “made-in-India global lifestyle brand”.
- The Reality: An analysis of its supply chain reveals a “manufacturing mirage.” The company remains heavily dependent on China, with 80-90% of its components and overseas purchases originating from China and Hong Kong. Its “Make in India” initiative is largely limited to final assembly of imported kits. Furthermore, the company’s financials are struggling, with flat revenue for three years and a 58% collapse in its wearables division.
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PhysicsWallah (PW):
- The Narrative: PW is being positioned as India’s first profitable ed-tech startup to go public.
- The Reality: This narrative is challenged by its own filings. While the company successfully narrowed its net loss in FY25 , its most recent quarterly data from Q1 FY26 shows net losses widened by 78% year-over-year. More importantly, 100% of the ₹3,100 crore in fresh capital from the IPO is earmarked for funding a capital-intensive offline expansion. This represents a significant strategic pivot away from a scalable, high-margin tech model toward a traditional brick-and-mortar coaching business.
Conclusion: A New Paradigm for IPO Investing
The 2025 IPO market demonstrates a clear maturation of India’s investor base. The strategy of investing based on brand recognition or subscription “frenzy” is no longer viable.
This shift is underscored by the regulator’s stance. SEBI has publicly affirmed that it will not intervene in the pricing or valuation of IPOs , placing the full burden of risk assessment on the market. This “caveat emptor” (investor beware) environment necessitates a more rigorous approach to due diligence.
For professionals and retail investors alike, the key takeaways are clear:
- Analyze Profit Quality (The Lenskart Test): Investors must look beyond the headline profit number to distinguish between sustainable operating income and one-off, non-operational gains.
- Assess Regulatory Risk (The Groww Test): A core part of valuation must be assessing whether a company’s primary revenue stream is aligned with, or in opposition to, the regulator’s trajectory.
- Audit the Narrative (The boAt & PW Test): Marketing narratives must be verified against the quantitative data in the official filings—specifically the “Use of Proceeds” and “Risk Factors” sections.
